Industrial output rose 4.6 percent in August from July, marking the first increase in two months and the biggest rise since January 1997, due to strong demand for electronics, automobiles and electricity, according to a preliminary report issued Wednesday by the Ministry of International Trade and Industry.

The seasonally adjusted index of industrial production hit 102.1 against a 100-point benchmark based in 1995.

While automobiles and electronic games for export to North America helped boost the IIP, new-model minicars, personal computers and mobile phones were also main contributors, the report says.

Meanwhile, shipments rose 4 percent in August to 103.4, marking the first increase in two months, with the help of air conditioners and cellular phones, automobiles and rolling stock, presses, steam turbine parts and semiconductor manufacturing equipment.

Indexes of production and shipments in all 14 industries improved in August.

The report says the trend in production and shipment is "showing signs of improvement." However, MITI officials said the IIP surge in August was partly attributable to longer working days since there were less Bon summer holidays than in an average year.

The officials said the future trend of final demand must be watched closely, noting that whether it will stay on a recovery path is uncertain.

The report projects a decrease in production by 1.3 percent in September and 0.7 percent in October, largely due to a backlash against August gains in industries such as electrical machinery, chemicals and steel in September, and in transport equipment and general machinery in October.