May 4, 2016 / 5:57 PM / 2 years ago

Chile business confidence remained weak in Q1 -central bank survey

SANTIAGO, May 4 (Reuters) - Most Chilean executives forecasted no short-term improvement in business prospects and described their results from the first quarter of 2016 as mixed, a quarterly central bank survey showed on Wednesday.

While some respondents saw a slight improvement for their businesses versus the fourth quarter of 2015, others saw a modest downturn.

“In any case, almost all of those consulted expect that 2016 will not be very different from last year,” the report said.

Chile’s central bank had said in March that the economy will grow between 1.25 percent and 2.25 percent in 2016, as continued weakness in mining investment due to cooling demand in China and falling prices for top export copper hold back a rebound.

At 2.1 percent, economic growth in 2015 was slightly higher than the five-year low of 1.9 percent seen in 2014.

Companies and banks said that the credit market remained tight and businesses said they were still focused on cost control rather than making new investments, but some respondents said cost-saving measures had been exhausted, according to the poll. That in turn was causing some businesses to fear a decline in purchase orders in the coming months, respondents said.

The tourism sector offered a bright spot in the survey, as Chile’s southern hemisphere summer drew in visitors, particularly from Argentina.

Real estate, however, was especially weak, as the speed of home sales plummeted.

Respondents said they perceived more people looking for work and job-seekers settling for lower salaries.

However, the poll also showed that executives remained concerned by a labor reform law making its way through Chile’s courts and legislature, despite a recent ruling that watered the legislation down.

The poll surveyed managers of approximately 190 businesses from March 30 to April 25. (Reporting by Gram Slattery; Editing by Anthony Esposito, Bernard Orr)

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