Industrial production rose a seasonally adjusted 0.3 percent in January from the previous month for the sixth straight monthly increase, the Ministry of Economy, Trade and Industry said Tuesday.

The index of output at mines and factories stood at 105.2 against the base of 100 for 2000, the highest reading yet, METI said in a preliminary report.

The six-month consecutive gain was also the longest based on the 2000 standards, beating five months of expansion from July to November 1999, a METI official said.

The outcome was below the average market forecast of 0.5 percent growth.

Looking ahead, the ministry said manufacturers forecast a 0.5 percent expansion in industrial production in February and a 0.7 percent decrease in March. The March decline will be due to regular maintenance of some chemical factories, the official said.

The ministry said industrial production is "gradually drifting upward" for the second straight month, as manufacturers projected no major declines in the index in the coming months.

The production index increased mainly due to a rise in cosmetics output before the launch of new products in February and March.

Manufactures boosted output of fluorescent lamps for backlighting in computers, lithium-ion batteries for use in mobile phones and air conditioners amid the cold weather in January.

Meanwhile, output of general machinery, including flat-panel display manufacturing machines, passenger vehicles, personal computers and mobile phones dropped in January following strong demand the previous month.

The index of industrial shipments gained 0.2 percent for the fourth straight monthly expansion to 107.9, also the highest based on the 2000 standards, and that of industrial inventories edged down 0.1 percent for the first fall in three months to 94.5.

Shipments of special steel, cosmetics, lithium-ion batteries and fluorescent lamps increased, while falls in stocks of vehicles for exports to the North American, European and Asian markets contributed to the overall inventory index decline, the official said.

Retail sales slip 0.2%

Retail sales inched down 0.2 percent in January from a year earlier to 10.65 trillion yen for the first fall in three months, as cold weather dampened demand for items such as spring clothing and cold beverages, the government said Tuesday.