Industrial output for March increased 0.5 percent from the previous month due to a rise in demand for exports, according to a preliminary report released Tuesday by the Ministry of Economy, Trade and Industry.

The increase marked the second consecutive month of growth.

The seasonally adjusted production index at mines and factories for March came to 92.6 against a 100-point benchmark established in 1995.

At the same time, the index of industrial activity for fiscal 2001 hit 94 and showed a 10.2 percent decline from the previous year, marking the largest year-on-year decline on record. The ministry began compiling statistics in 1954.

Despite the growth for March, the ministry maintained that overall production is stagnating, noting the increase in production can be observed only in limited sectors.

"We can see a bright spot in (the production of) electronic parts, and inventories are decreasing. On the other hand, we can't say yet that the positive activities are likely to spread to other sectors," a ministry official said.

The official also said prospects for an increase in domestic demand remain unclear.

The official attributed the month-on-month growth in March to an increase in export production of cars, electronic parts for mobile phones and computers.

The ministry expects that industrial output will grow 1.3 percent in April and 3.1 percent in May, mainly due to expected stable demand for cars and electronic machinery.

Shipments for March increased 0.7 percent on a month-on-month basis.

Inventories for March dropped 2.2 percent from the previous month to 90, declining for the seventh consecutive month.