CHICAGO, Aug. 30 (Xinhua) -- The Chicago Purchasing Managers Index (Chicago PMI), also known as Chicago Business Barometer, rose 6.0 points to 50.4 in August, up from 44.4 in July, after the index remained sub-50 reading for two consecutive months.

However, some of the Business Activity components saw a monthly decline. Supplier deliveries saw a sharp fall, dropping to 50.3 from July's 55.6, according to the index report released on Friday.

Chicago PMI is a composite diffusion indicator made up of production, new orders, order backlogs, employment, and supplier deliveries compiled through surveys. Values above 50.0 indicate expanding manufacturing activity.

The survey still suggested a softer overall tone in business activity despite the August pick-up in sentiment, as the three-month average fell again, dipping to 48.2.

Production remains muted, despite a pickup of 6.7 points. Demand recovered slightly, highlighted by an increase in new orders, which saw the largest single component monthly gain and shifted back into expansion.

Order backlogs recovered to 51.3 in August after three straight months below 50. The index stood at 43.5 in July.

Labor demand improved in August, with the employment indicator rising slightly to 43.7, however the component has remained in contraction since July.