One of Britain's leading economic thinktanks has called an end to the recession after industrial output showed its first rise in more than a year in April.

The National Institute for Economic and Social Research said March this year was the trough of the downturn that began in the summer of 2008.

NIESR said that output had risen in both April and May after a tough first three months of the year that saw the economy contract by 1.9%. If sustained in June, the second quarter of 2009 would show the first increase in gross domestic product since the first three months of 2008.

"The monthly figures are inevitably erratic but the picture is coherent with the broader picture of stabilisation which has emerged since we first suggested that the output had stopped falling in our GDP release on 13 May", the NIESR said.

Earlier, figures from the Office for National Statistics (ONS) showed a 0.3% increase in production after a run of falls that began in March 2008.

Manufacturing output – the largest component of industrial production – was up by 0.2% in April, while the ONS also revised up a previously estimated drop of 0.1% in March to a 0.2% increase. Output of oil and gas from the North Sea also rose.

Despite the pickup in April, the ONS said industrial output in the latest quarter – a guide to the underlying trend – was down 3.2% on the previous three months and 12.6% lower than in the February-to-April period of 2008.

Manufacturing output fell 2.8% on the quarter and by 12.1% on the year.

The government will, however, be boosted by evidence that the sharp devaluation of the pound and the easing of monetary policy to boost growth appear to be working.

The Prime Minister's spokesman said: "There are clearly signs that the action the government has taken is starting to have effect, but it remains a very, very difficult global situation that our businesses are facing. There is no room for complacency."

In common with the rest of the world, Britain's factories slashed production after the collapse of Lehman Brothers last September paralysed the financial markets. Many factories were either closed or put on short-time working.

Recent data has suggested, however, that companies have run down stocks of goods and now need to increase output to meet demand.

Amit Kara, an economist at UBS, said: "It's not too surprising we have seen the [manufacturing] sector expand after the purchasing managers' index figures. Going forward, the currency effect should start feeding through into the manufacturing data.

"From a policy perspective, it's not going to make much difference. The Bank of England's monetary policy committee will want to see more evidence of a sustainable recovery before they consider an exit strategy."

Separate figures from the ONS revealed the UK's trade deficit widened to its biggest gap in April since September last year. A flat performance by exports and an increase in imports pushed the visible trade gap up from just under £6.5bn to just over £7bn.