Chilean manufacturing production fell 4.2 percent in May from a year ago due to a high base of comparison and a drop in the production of chemical and metal products and wine, government data showed. The fall was well below a Reuters poll forecast for a 1.7 percent increase, a 2.7 percent drop in April and a 3.5 percent increase in May 2012. In the first five months of the year, manufacturing output has inched up a paltry 0.2 percent compared with the same period of 2012, the INE statistics agency also said in its report. May manufacturing output fell 4.8 percent compared with April. Export-dependent Chile has been bracing for a slowdown in demand from top metals consumer and chief trade partner China. While the Andean country's robust economy initially withstood a gloomier global economic outlook, it has slowed more sharply than forecast in recent months, prompting bets of a rate cut to stimulate growth. Domestic demand, which has been one of the key motors behind Chile's economic growth, has also moderated, but is still growing at a healthy pace. Retail sales grew 13.2 percent on the year in May, after increasing 10.9 percent the prior month, the INE said. They expanded 3.7 percent in May from April. Also on Friday, the INE reported the jobless rate for the March to May period remained steady at 6.4 percent, as a drop in domestic, public administration and manufacturing jobs was countered by a pick-up in retail and construction. COPPER OUTPUT UP World No. 1 copper producer Chile produced 475,140 tonnes of the red metal in May, a 3.7 percent rise from a year earlier, on a low base of comparison and better ore grades in some deposits, the government also said on Friday. Chile, which produces a third of the world's copper, is struggling with dwindling ore grades in many of its aging deposits, although new mines have helped increase output this year. Production grew 4.4 percent in the first five months of the year to 2.29 million tonnes. It was up 7.6 percent in May compared with April. Chile's output of molybdenum, a metal used to harden steel, rose 1.9 percent in May versus the year earlier to 2,702 tonnes. In the January to May period, production of molybdenum jumped 13.8 percent to 14,791 tons. (Reuters)