Business activity in the Chicago area climbed in August as orders accelerated, a sign that manufacturing will continue to add momentum to the economy.
The Institute for Supply Management-Chicago Inc.’s business barometer rose to 64.3 this month from 52.6 in July. The median forecast of 44 economists in a Bloomberg News survey projected the index would climb to 56.5. Readings greater than 50 signal growth.
Manufacturing, which makes up about 12 percent of the economy, has been supported by rising demand for durable goods such as automobiles, appliances and machinery.
Faster improvement in the labor market could generate more wage growth and further boost consumer purchases, in turn feeding demand for factory-made goods.
As orders rose at a faster pace this month than in July, while factory employment grew at a slower pace this month.