Chicago-area business activity unexpectedly grew at a faster rate in the month of June, according to a report released by MNI Indicators on Friday.

MNI Indicators said its Chicago business barometer climbed to 64.1 in June from 62.7 in May, with a reading above 50 indicating growth. Economists had expected the index to drop to 60.0.

The unexpected increase by the business barometer was partly due to continued growth by the new orders index, which rose for the second straight month to a five-month high.

The employment index also increased for the second month in a row in June, although MNI Indicators noted hiring sentiment dipped during the second quarter.

On the other hand, the report said the production index lost ground for the fourth time since peaking in December, with firms stifled by issues higher up in the supply chain.

In light of recent trade disputes between the U.S. and other major economies, MNI Indicators asked firms whether ongoing trade talks were having an impact on short-term purchasing decisions.

Just under a quarter of firms said the talks were having a significant impact on business, while an additional 39.2 percent said yes but only to a minimal extent up until now.

Meanwhile, 17.7 percent of firms said they had been immune to any disruptions, with the remaining 19.6 percent unsure.

"Confusion surrounding the trade landscape continues to breed uncertainty among businesses and their suppliers and has led to many firms' altering their immediate purchasing decisions," said Jamie Satchi, Economist at MNI Indicators.

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