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The nation’s industrial production fell 1.4 percent in 2002, after a 7.8 percent decline in 2001, as signs of improvement in the early part of the year faded, the Ministry of Economy, Trade and Industry said in a preliminary report Wednesday.

The index of output at mines and factories registered 95.4 against the 1995 base of 100, its lowest since hitting 94.9 in 1988.

The second straight yearly fall came after signs of improvement that had appeared in early spring began to dwindle in fall, particularly in electric machinery, a METI official said.

Output declines in such products as construction machinery, semiconductor production machinery, personal computers, metal products and textiles more than offset gains in automobiles and steel, the official said.

The index of industrial shipments lost 0.3 percent, after the previous year’s 7.5 percent decline, to 98.8, its lowest figure since 1994.

But the index of industrial inventories decreased 7.8 percent, following a 2.1 percent drop, to 85, down by the largest margin since 1975 and reaching the lowest index reading since 1988.

Industrial production and shipments turned down in the October-December period after growth in the earlier part of 2002.

The output index edged down a seasonally adjusted 0.9 percent from the previous quarter to 96.7 and the shipment index fell 0.2 percent to 100.6, both the first downswing in four quarters.

The inventory index dropped 0.8 percent, after a rise in the previous quarter, to 87.

In December, the production index dipped a seasonally adjusted 0.1 percent from the previous month to 96.1, weighed down in part by output delays in semiconductor production machinery for export.

METI maintained its view that industrial production is weakening, after downgrading its view on output in October and November.

On the positive side, output of transport equipment, excluding railway cars and ships, rose 1.7 percent and that of chemical products except for drugs rose 1.4 percent due to cosmetics.

The ministry said it expects industrial production to rise 2.1 percent in January but fall 1.1 percent in February.

The shipment index fell 2.1 percent to 98.9 in December, and the inventory index was up 1 percent to 87.

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