The business index, covering Illinois, Indiana and Michigan, regained a portion of what it lost in June when it slipped from 58.7 to 51.6.
The index, which indicates growth with numbers above 50, rose to 52.3 despite declines in new orders, employment and production.
Each of those components came in above 50, the Institute said. In contrast, the index for order backlogs rose but remained below 50.
Production and new orders both dropped to the lowest levels since April. Inventories came in with the sharpest contraction since November 2009.