CHICAGO, Illinois, August 5, 2026 — Regional business activity continues to defy expectations. The Chicago Business Barometer–better known to some as the Chicago PMI–rose to 57.6 in July, up nine-tenths of a point from June’s 56.7, according to figures released by MNI Indicators. In fact, economists had expected the index to drop to 56.0. Instead, it increased for the third consecutive month.
A reading above 50 means the region’s business activity grew; anything below it points to contraction. Three straight months above that line is important, especially since the index has been so erratic this year. March came in at a surprise fall to contraction at 49.2 for April Then, May jumped to 62.7, the highest level four years ago. June cooled slightly to 56.7. The increase in July, though slight, continues the recovery.
The biggest chunk of the July gain was new orders which rocketed 11.6 points, to their highest since January 2022. That’s an important signal — new orders typically lead future production, so such a leap indicates businesses in every corner of the Chicago area are seeing rising demand next.
Then again, not every piece of the report was headed in the same direction. Supplier deliveries fell in July after June’s sharp rise, down 9.5 points (this is a positive number — so the plunge means suppliers are slowing this month) and “some respondents flagged ongoing delays for electronic components.” New Zealand’s order backlogs edge down 5.2 points, reversing into contraction after two months back above the neutral dividing line. Employment dropped 3.8 points for a fifth consecutive month of contraction and its lowest reading since March. Production was up slightly but remained within expansion territory.
Prices paid hardly changed, but respondents cited pressures from geopolitical conflict and still-high energy costs as two outlets of persistent pressure even where price stability more broadly seems to be improving.
The Chicago Business Barometer is a regional survey of purchasing managers’ sentiment and covers both manufacturing and services firms. They ask respondents if conditions — production, new orders, employment and the like — were better, worse or the same as a month earlier. This is closely monitored as a leading indicator because purchasing managers have early sight of changes in demand and supply, and for its close correlation to national GDP data.
Which is part of why July’s number came in as a slight upside surprise. It came the same morning as second-quarter employment cost data, and just before a further avalanche of national manufacturing toplines reported early next week on how business conditions in the Midwest are shaping up by mid-2026 into chaos.
The contraction in employment is something to watch. Five months of weaker employment numbers, despite ongoing growth overall, indicate firms are finding ways to get more out of fewer hands, whether that is by using efficiencies and automation or just a wariness about what lies ahead this winter. The turning point still must be determined hence a national August will clarify whether that trend continues (up) or reverses along with the recent uptick in new orders.
The headline number gives a reason for caution about the region’s economy, but some of the underlying details tell a more complicated story — at least for now.
Economists still see the Chicago Business Barometer as one of the Midwest’s first traditional indicators of business conditions as it is a town based report—a reconstruction that reflects measures taken by purchasing managers on demand, production activity, employment and suppliers before many broader economic reports are made public—though there is an expectation that it will be revised downwards further into future months (it goes only until July 31st 2026). Monthly survey results can vary, however readings well above the 50-point mark for many months typically signal expanding business activity, and between employment and new orders and production trends, differences may indicate whether growth is widespread or restricted to some sectors. Analysts usually put these figures alongside forthcoming national manufacturing and labor market data to assess whether regional trends are likely to persist or moderate in subsequent months.
