KUALA LUMPUR - Malaysia's April factory output fell 11.4 percent in April, better than expected, but in spite of a deceleration in the decline analysts say a recovery in industrial activity is unlikely until year-end.

The data surprised economists who had expected a drop of 13 percent in a Reuters poll after exports for the same month plunged 26.3 percent from a year ago.

"The outcome was certainly better than expected, especially when we compare it with the sharper decline of April exports," said Standard Chartered economist Alvin Liew.

"We would still expect some more months for the IPI and manufacturing indices to remain in the negative territory, with the declines in some months magnified by strong base effect in 2008. Industrial activity is still only expected to record meaningful recovery only late in 2009."

The industrial production index slowed again in April from a revised drop of 12.7 percent in March and has eased compared to the 17.9 percent fall in January.

The manufacturing component of the index, which also measures mining and electricity output, was down 15.7 percent in April from a year earlier.

"Looking at the breakdown, there have been rather significant upward revisions made to the manufacturing sector which accounts for more than half the IP index from Jan 09 onwards.

Due to these figures, Q1 IP showed a near 2 percentage point improvement though still in the contraction zone," said Joanna Tan, economist at Forecast.

Thailand's manufacturing production index fell by a smaller 9.7 percent in April from a year ago after revised 14.9 percent in March, significantly above expectations, while industrial output in South Korea slid 8.2 percent.

"Nonetheless, looking at recent industrial-related indicators like those in Germany and Japan (both economies being top exporters in the world) which are still weak, we believe that the worst is over for industrial activity globally but it is still not out of the doldrums yet," said Standard Chartered's Liew.