The Chicago Purchasing Managers' Business Barometer rose to 50.0 in August from 43.4 in July, the National Association of Purchasing Management-Chicago said yesterday.
This was the index's first neutral reading after 10 straight months of sub-50 readings. New orders and production also were above 50 for the first time in a year.
The data is compiled on a seasonally adjusted basis. An index reading below 50 signals a slowing economy, while a level above 50 suggests expansion.
Economists polled by Thomson Reuters predicted a 47.8 reading for the indicator.
The production index was up to 52.9 from 43.3 in the prior survey, the new orders index rose to 52.5 from 48.0, the order backlogs index increased to 45.8 from 32.1, and inventories rose to 27.5 from 25.4.
The employment index climbed to 38.7 from 35.3, and the supplier deliveries index rose to 54.6 from 49.6 last month. The prices paid index increased to 50.0 from 35.0.