At the same time, sentiment regarding the 12-month outlook for output softened to a level that was among the lowest in the series history, with optimism dampened by worries over the future trading relationship of China and the U.S., as well as signs of weaker global conditions.
The reading followed Beijing's official PMI that showed factory activity shrank in August for the fourth month in a row, pointing to a further slowdown in the world's second-largest economy.
The subdued sales to domestic and worldwide clients in turn curbed output growth, which softened to the weakest in a year.
There were steep reductions in new orders across several industries, against a backdrop of heightened political chaos and falling export demand across the world amid the US-China trade war.
But there are signs the economy may start to lose the support from consumption and capital expenditure.
"With uncertainty ahead that is not limited to trade tensions between China and the United States, but also includes increased chances of a no-deal Brexit and slowing global demand, it seems unlikely that the trend in world trade growth will improve markedly in the months ahead".
The employment subindex inched up to the highest point in five months, coming in a tad below 50, indicating that manufacturing employment was more or less stable in August, according to the survey.
Looking ahead, although firms generally anticipate output to increase over the next year, the degree of confidence weakened from July, largely due to concerns over the ongoing China-US trade dispute and signs of a slowing global economy, the report showed.
The gauge for future output expectations, which measures how optimistic or pessimistic manufacturers are about their production for the following 12 months, inched down in August, although it remained in positive territory.