By Josh Mitchell and Jason Douglas 

Manufacturing activity is falling in most of the world's advanced economies, another sign that a deepening global slowdown is weighing on the U.S. expansion.

An index of factory activity in August declined in the U.S., Japan, Germany and the eurozone, IHS Markit said Thursday. The U.S. decline marked the first manufacturing contraction there since September 2009, according to the firm's surveys of purchasing managers. The gauges fell in Italy and the U.K. in July, the firm said recently.

The IHS manufacturing indexes are imprecise because they are based on surveys and combine figures including product sales, inventory levels and commodity prices to come up with an index of factory "activity," designed to broadly assess the sector's health.

But the reports comport with other warning signs that have flashed recently about the U.S. and global economies.

"It's a reflection of growing global pessimism among purchasing managers, " said Joe Brusuelas, chief economist for RSM US, a consulting firm. He said their darkening mood "is clearly associated" with the trade dispute between U.S. and China. "Further escalation of the trade war risks spillover in the service and household sectors, which could signal a much larger risk of recession in 2020," he added.

While government figures suggest the U.S. and global economies continue to expand, Thursday's data added to growing evidence of a deepening slowdown.

The International Monetary Fund last month said a sharp deceleration of global trade driven by trade tensions was slowing the global economy more than it expected in the spring. It forecast global growth, adjusted for inflation, would fall to 3.2% this year, from 3.6% last year and 3.8% in 2017.

The recent decline in U.S. factory activity appears to be tied to three factors, Mr. Brusuelas said: softening demand for motor vehicles; weaker sales at aircraft maker Boeing Co.; and the U.S.-China trade dispute.

The factory malaise appeared to weaken the broader U.S. economy. IHS released a "composite output index" -- reflecting production by manufacturing and service companies alike -- that showed the record-long expansion losing momentum. That index fell to 50.9 in August from 52.6 a month earlier and, along with May, equaling the lowest since February 2016. A reading above 50 signals expansion, while a result below that level indicates contraction.

IHS said a measure of U.S. job creation among the companies it surveyed fell to the lowest level since 2010. "Meanwhile, confidence in relation to the year-ahead business outlook dropped for the seventh month running to its lowest since this index began in July 2012," it said.

Total output in Australia shrank in August for the first time in five months, according to a separate survey released Thursday by Commonwealth Bank of Australia and IHS Markit.

Economic activity in the eurozone rose at a muted pace in August, as a pickup in France offset continued sluggishness in Germany, the currency bloc's largest economy.

One bright spot was Japan, where activity expanded at the fastest pace in eight months, according to the surveys.

Figures released earlier this month showed economic output in Germany contracted in the second quarter, while a report on factory output in China came in lower than expected, triggering market volatility.

The reports came as major central banks are preparing to provide more stimulus measures to bolster growth. The U.S. Federal Reserve cut interest rates in July, partly in response to cooling global growth, and is likely to continue lowering them this year.

The minutes of Fed officials' July meeting, released Wednesday, showed policy makers believed uncertainty surrounding the Trump administration's trade policy wasn't likely to let up soon, creating a "persistent headwind" for the U.S. economic outlook.

And minutes of the European Central Bank's recent policy meeting, released Thursday, gave a further signal that it would launch a big stimulus package next month, which could include rate cuts and asset purchases, in an effort to arrest the region's economic slowdown.

Write to Josh Mitchell at joshua.mitchell@wsj.com and Jason Douglas at jason.douglas@wsj.com

(END) Dow Jones Newswires

August 22, 2019 18:25 ET (22:25 GMT)