Texas business activity slowed down but remains positive for July, according to a Dallas Federal Reserve Texas Manufacturing Outlook Survey (link opens a PDF) released today.

After June's report clocked in at 6.5 for a two-year high, this month's 4.4 rating didn't quite make the cut of analysts' 6.4 expectation.

Source: Federal Reserve Bank of Dallas. 

The monthly survey asks about 100 Texas manufacturers to rate their views on current and future business activity. Market watchers keep a close eye on this index, as Texas' manufacturing can serve as an important indicator of national economic health. A positive number indicates month-over-month growth, while a negative number means contraction.

Taking a closer look at the index's components, employment made the largest growth gains, adding 9.1 points for an overall 9.3 reading. Capital expenditures led this month's dip, down 6.4 points, but remained in positive territory at 3.5. The all-important "new orders," "growth rate of orders," and "unfilled orders" components fell between two and four points but managed to stay positive for July.