Levels of output, new orders, new export business and employment fell while those for stocks or purchases and input buying volumes rose, IHS Markit said as the headline index rose to 48.3 in September from 47.4 in August. In PMI parlance, a print above 50 means expansion, while a score below that denotes contraction.
"Job losses are widespread across the sector as its continued weakness has seen employment fall at the most severe rate since the peak of the Global Financial Crisis".
Worldwide think tank IHS Markit released a report on Tuesday saying operating conditions in the manufacturing sector of the region continued to deteriorate in September this year. -China trade war increasingly weigh on the sector.
Commenting on the latest survey results, Pollyanna de Lima, principal economist at IHS Markit, said: "We have seen the gradual slowdown in the manufacturing sector conditions continue in the second quarter of fiscal year 2019-20, with the PMI average for the quarter at its joint lowest since the same period in 2017".
"Analysis of comparable historical official data on Malaysian manufacturing suggests at current level, the survey's output index is consistent with annual production growth of just over 4%", it said.
Total orders were slightly better than in August but still in contraction. Analysts had been expecting a rebound in September, after August marked the first time in three years that U.S. manufacturing activity had contracted. The headline index for the eurozone was 45.7, its lowest since October 2012.
Germany's leading economic institutes are set to lower on Wednesday their growth forecast for the economy for this year and next, sources told Reuters on Monday, adding to fears that a recession among export-driven manufacturers is spreading.
Canadian manufacturing activity expanded in September at the fastest pace in seven months as new orders and production picked up, data showed on Tuesday.
India's economic growth has slumped for the fifth straight quarter to an over six-year low of 5 per cent in the three months ended June as consumer demand and private investment slowed amid deteriorating global environment.
"There appears to have been progress made on large infrastructure projects after months of delays, with some manufacturers reporting more projects going ahead and increased tendering opportunities", the report added. "The single biggest way to do that is to open up the new export orders", he said.