UPDATE 1-Thai Dec factory output up 0.54 pct, below f'cast

* Dec factory output +0.54 pct y/y vs +2.50 pct in Reuters

poll

* Dec capacity utilisation 63.26 pct vs Nov's 66.71 pct

* 2017 output seen up 0.5-1.0 pct - ministry

(Adds revised 2016 output change and 2017 outlook, in 6th

paragraph)

BANGKOK, Jan 31 (Reuters) - Thailand's industrial output

rose for a second straight month in December, boosted by

stronger demand for steel, electronics, rubber and jewellery,

but the gain was small, suggesting the economic recovery remains

fragile.

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