TOKYO, Oct. 7 (Xinhua) -- A key index revealing Japan's economic state logged in August the largest decline in 15 months, as the auto production was struck amid a global shortage of semiconductors, government data showed Thursday.

The coincident index of business conditions by the Cabinet Office for the reporting month dropped 2.9 points from July to 91.5, compared to a base of 100 in 2015. It is regarded as the sharpest decline since a drop of 7.1 points recorded in May last year when the country was under its first state of emergency due to COVID-19.

The office maintained its assessment that the country's economy is "improving", using the most positive word in the five-level evaluation for the sixth consecutive month, although the index declined for the second successive month, after falling 0.2 points in July.

The index representing levels of industrial output and shipments dropped as the automotive industry has borne the brunt of the chip crunch, and is also affected by a shortage of auto parts which is triggered by factory shutdowns in Southeast Asian nations amid surges in COVID-19 infection cases, a government official said.

Meanwhile, the retail sales index also declined as people are reluctant to go out amid a resurgence of the pandemic, causing the sales index of convenience stores to become poor.

In August, the leading index of business conditions which predicts the situation in the coming months also dropped for the second consecutive month, slipping 2.3 points to 101.8. Enditem

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