HIGHLIGHTS-Japan industrial output slides, slowdown feared

(For economists' views on the data, click on [ID:nT340955])

TOKYO, Feb 28 (Reuters) - Japan's industrial production fell twice as much as expected in January, sending stock prices lower on heightening concern that the country's economy may slow down or even contract in the first quarter of 2008.

Economists have said companies will likely begin to feel the pinch from the U.S. slowdown, although exports have remained firm so far.

Following are key points of the industrial production data, with details from a briefing by officials at the Ministry of Economy, Trade and Industry. [JPIP1=ECI]

- Industrial output fell 2.0 percent in January from a month earlier, compared with a consensus market forecast for a 0.8 percent drop.

- The drop in January was the largest since the same month a year ago, when output fell 2.3 percent.

- Manufacturers expect their output, the core component of production, to fall a further 2.9 percent in February but to rise 2.8 percent in March.

- If output turns out as forecast in February and March, output in the first quarter of 2008 will fall 2.5 percent from the previous quarter, which would be the biggest quarterly drop since a 2.6 percent decline in the last quarter of 2001, the ministry said.

- The ministry maintained its assessment on industrial production, saying it was in a flat trend, after downgrading its view in December. It had previously said that output was on a moderate rising trend.

- Output in January declined mainly because production of electronic parts and devices, including parts for liquid crystal display panels and notebook PCs, as well as automobiles and auto parts fell in light of slower exports, a ministry official said.

- In the electronic parts and devices sector, shipments to Asia and Europe fell most conspicuously, a ministry official said.

- Automobile makers pointed to slower exports to the Middle East and North America as a major reason behind the fall in output, the ministry official said.

- But the official said the companies surveyed have so far not expressed serious concerns about a slowdown in the U.S. economy.

- "If demand from the North American market does cool down, it would have a significant impact on sectors such as electronic devices," the ministry official said. "So we need to be cautious about downside risks."

- The latest data showed that shipments declined 0.9 percent in January from the previous month, but the drop coincided with a 1.3 percent fall in inventories, indicating that future production is unlikely to be hampered by piles of inventory. (Reporting by Yuzo Saeki)