The Ministry of Economy, Trade and Industry on Wednesday downgraded its assessment of industrial production for the second month in a row after January's output figures dropped a record 3.9 percent from the previous month.

The seasonally adjusted production index of mines and factories reached 103.2 against a 100-point benchmark established in 1995, according to a preliminary report.

A ministry official attributed the month-on-month decline, the first in two months, to a decline in production of such items as cars and steam turbines, while pointing out the impact of decelerating exports of cars and electronic components.

The ministry described industrial production activities as "flat," compared with the previous month's judgment that output is "on a trend of gradual improvement."

It is the first time the ministry has used the expression "flat" since July 1997. The latest downgrade came one month after the ministry lowered its output evaluation to "a trend of gradual improvement" from "a trend of improvement."

A ministry official said the downgrading reflects January's substantial setback and expectations that output will continue to be weak for some time.

"Under such circumstances, it is inappropriate to keep on saying that output is gradually rising," he said.

"Although we expect industrial output to grow in February, we anticipate a decline for March," the official said.

The ministry expects industrial output to grow 2.7 percent in February and decline 1.4 percent in March on a month-on-month basis.

Shipments for January dropped 3.8 percent from the previous month, marking the first decline in two months, and the seasonally adjusted index of shipments reached 105.2.

The inventories index in January edged up 0.6 percent to 96.1, marking the first upturn in three months.

The official attributed the increase in inventories to an increase in such items as electronic devices and cars.