Statistics Korea said the March output appeared relatively weak due to a strong showing in February when it grew 2.6 percent on-month, mainly thanks to consumer demand over the Lunar New Year holiday.
Increased production of key electronic parts, especially LCD screens, in overseas plants, also led to a reduction in domestic industrial output, it said.
Compared with a year earlier, the industrial output -- including production in the mining, manufacturing, gas and electricity industries -- was down 0.1 percent, Statistics Korea said.
Production in the service sector also fell 0.4 percent from February but moved up 3.1 percent from a year earlier.