Industrial production rose 3.2 percent in 2003 for the first increase in three years, due partly to steady demand for mobile phones and other digital home appliances, the government said Thursday.

The index of output at mines and factories registered 94.9 against the base of 100 for 2000, the Ministry of Economy, Trade and Industry said in a preliminary report.

The index of industrial shipments gained 4.0 percent to 97.2 for the first rise in three years, while the industrial inventories index declined 2.0 percent to 88.6 for the third consecutive yearly drop.

Industrial production in the electronic parts and devices sector expanded last year, more than offsetting drops in five sectors, including the textile industry and the pulp and paper industry, a METI official said.

The report indicates that industrial production is on a recovery track as the 2003 growth followed declines of 1.3 percent in 2002 and 6.8 percent in 2001.

In the October-December quarter, the index of industrial production climbed a seasonally adjusted 3.6 percent from the previous quarter to 98.0 for the second straight quarterly rise.

The shipment index gained 3.8 percent to 100.5 in the October-December period, rising for the eighth consecutive quarter to its highest level since the current base year of 2000 was adopted, the official said.

The inventory index slipped 0.8 percent to 90.5 in the reporting quarter.

In December, the index of industrial output fell a seasonally adjusted 1.0 percent from the previous month to 97.7 for the first decline in four months, due mainly to a drop in the general machinery sector following a rise in the previous month, the official said.