April 13 (Bloomberg) -- China’s March power output fell about 2 percent from a year earlier as the world’s third-biggest economy slowed, said an official from the China Electricity Council, citing preliminary data compiled by the industry group.

The drop is smaller than in previous months, the official said today, declining to be named before the data’s release. Power production fell 3.7 percent in the first two months from a year earlier, the National Bureau of Statistics said on March 12.

The Chinese economy expanded at the slowest pace in seven years in the fourth quarter of 2008 as industrial production slumped, eroding demand for power. Electricity use rose “noticeably” last month from February as the government’s economic stimulus measures took effect, the China Central Television reported on April 11, citing the industry group.

The smaller decline in electricity output in March is a “positive sign,” the official said.

Electricity consumption in the eastern province of Zhejiang rose 30 percent in March from February, while power use in the country’s manufacturing hub of Guangdong climbed 26 percent, the state-run television station said.

China’s industrial production climbed 8.3 percent in March from a year earlier, Xinhua News Agency said yesterday, citing an interview with Premier Wen Jiabao. Factory output rose 3.8 percent in January and February from a year earlier.

The nation’s power output fell 0.7 percent in March from a year earlier, Caijing magazine reported on April 3, citing the State Grid Corp. of China, the country’s biggest electricity distributor.

To contact the reporters on this story: Eugene Tang in Beijing at eugenetang@bloomberg.net; Wang Ying in Beijing at ywang30@bloomberg.net.

Last Updated: April 13, 2009 06:43 EDT