A key index reflecting the current state of the economy logged its largest drop ever in April after a nationwide state of emergency was declared to fight the novel coronavirus, government data showed Friday.

The Cabinet Office's coincident index of business conditions for the reporting month fell 7.3 points from March to 81.5 against the 2015 base of 100, the sharpest decline since the government began releasing comparable figures in January 1985.

The headline figure sank for the third consecutive month, following a 4.9-point drop in March. The office maintained its assessment that the economy is "worsening," using the most pessimistic expression for the ninth consecutive month.

The state of emergency was first declared on April 7 for Tokyo, Osaka and five other areas and was expanded to cover the entire nation about a week later. Authorities asked people to refrain from going out and businesses to suspend operations.

A government official told reporters that the index was most influenced by poor shipments of durable consumer goods such as cars and motorcycles, while demand for steel and other products weakened considerably.

"I believe manufacturers lagged in procuring parts to be used for their products (as supply chains were disrupted) due to the pandemic, and factories were forced to suspend their operations, which caused the negative effects," the official said.

The margin of the drop exceeded the previous record of 6.4 point in January 2009 in the aftermath of the global financial crisis, and the 6.3-point decline in March 2011, when a massive earthquake and tsunami devastated the Pacific coastline of Tohoku.

The April number is the lowest since the 80.1 recorded in October 2009.

The leading index of business conditions, which forecasts the situation in the coming months, also posted a record fall for the second consecutive month, plunging 8.9 points to 76.2 in the reporting month.

Following a fall in the number of new COVID-19 cases, the government completely lifted the emergency declaration on May 25. But concerns over potential second and third waves of infections remain.

Largely affected by the pandemic, the economy shrank an annualized real 3.4 percent in the January-March quarter, a significant contraction for the second consecutive quarter, which pushed the world's third-largest economy into a technical recession, according to the government's preliminary data.

The Cabinet Office is due to release revised GDP for the first quarterr on Monday.

Many economists expect GDP to contract around 20 percent in annualized terms in the April-June quarter but to rebound to some extent from July to September.

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