The index, which covers business conditions in the industrial belt of Indiana, Illinois and Michigan, rose to 51.6 in December, up from November's 50.4 reading and October's mark of 49.9.
The index uses 50 as the dividing point between contraction and expansion. As such, 51.6 indicates modest business growth in the region.
The index was in the red in September and October.
Among composite indexes in December, the new orders index had its biggest advance in 19 months. The employment index, which tracks number of employees, shifted lower to a three-year low of 45.9.
The production index remained in positive territory but dropped in the month from 54.7 to 53.8.
The report is produced by the Institute of Supply Management-Chicago Inc. and Deutsche Borse AG.
Among the anonymous comments listed in the report, one survey respondent said: "We have just acquired a smaller competitor. But business in general is still quiet."
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