Several key indicators of industrial activity on the mainland, including power consumption, were on the rise thanks to the government's huge stimulus package, a top official said yesterday. Minister of Industry and Information Technology Li Yizhong said mainland power consumption rose about 4 per cent last month, the first increase in five months. But the combined demand for power consumption in the first two months of the year was still 3.7 per cent lower than a year earlier and followed a 7.5 per cent decline in November and an 8.7 per cent drop in December. Shenyin Wanguo senior securities analyst Qu Qing said the year-on-year decline in the first two months was less because snowstorms in February last year had a big impact on industrial activity. Nomura International chief China economist Sun Mingchun said that given the high correlation between industrial output and electricity production, the milder decline in power output could mean a pick-up in industrial output growth in data due to be released tomorrow. He said Nomura estimates suggested the uptick could be about 8 per cent year on year in January-February, from 5.7 per cent in December. He said even a conservative estimate of 7 per cent for industrial output growth would still be higher than the consensus forecast of 6 per cent. Mainland media have forecast China's power output to fall 4.3 per cent to 487.4 billion kilowatt-hours in the first two months of the year. The data will also be released tomorrow. Mr Li also said the steel sector had recovered to 90 per cent of capacity, with steel output in the first two months rising 3.1 per cent from a year earlier and crude steel production up 2.4 per cent. He said car production rose to 850,000 units last month, the highest level since July. Combined vehicle output for the first two months slid 1.7 per cent from the same time last year to 1.53 million units, but the contraction was much slower than in previous months. Many industries, including chemicals, construction and communications, had started ramping up production, he said. 'In this sense, the moderation of the decline of power consumption in the first two months showed some positive signals, but the condition remains serious,' Mr Li said. He quoted Commerce Minister Chen Deming as saying that the global financial crisis had not bottomed out and its impact was getting worse.