The Federal Reserve Bank of Dallas reported Monday its general business activity index for manufacturing in Texas fell to 27.3 in July from an unrevised 31.1 in June, pointing to a continuing expansion in Texas factory activity, albeit at a slower pace than in recent months. This was the lowest reading since February.

According to the report, the production index, a key measure of state manufacturing conditions, came in at 31.0 in July, up 1.6 points from 29.4 in June, being well above its average and pointing to strong output growth. The new orders index edged up 0.1 points to 26.8, and the growth rate of orders index increased 2.4 points to 25.8. At the same time, the shipments index ticked down 0.2 points to 31.6, while the capacity utilization index slipped 0.7 points to 29.9, remaining at highly elevated levels. Elsewhere, the employment index rose 0.8 points to 23.7. On the price front, the raw materials prices index dropped 7.3 points to 73.5 and the finished goods prices index declined 1.9 points to 40.9, easing off the all-time highs reached last month. Meanwhile, the wages and benefits index decreased 2.1 points to 46.0, retreating from its historical high of 48.1 in June.