US manufacturing data showed the first contraction since 2016 on worries about a weakening global economy and US-China trade tensions, said a report.

The Institute for Supply Management (ISM) said its index of national factory activity decreased in August to 49.1, the lowest since January 2016, added the Reuters report.

A reading below 50 indicates contraction in manufacturing, which accounts for about 12 per cent of the US economy. Last month marked the first time since August 2016 that the index broke below the 50 threshold.

Don Ellenberger, head of multi-sector strategies at Federal Investors in Pittsburgh, was quoted in the report as saying that once we go below 50, it tells you manufacturing is starting to contract.

Concerns about the economy, which is in its longest expansion ever, were also exacerbated by other data on September 3 showing construction spending barely rising in July. The economy’s waning fortunes have been blamed on the White House’s year-long trade war with China.