The Federal Reserve Bank of Dallas reported its general business activity index for manufacturing in Texas rose to -3.0 in July from an unrevised -6.1 in June, pointing to continuing improvement in Texas factory activity in July following a record contraction in the spring.

Economists had forecast the indicator to increase to -4.9.

According to the report, the production index, a key measure of state manufacturing conditions, rose to 16.1 from 13.6 in June, suggesting a slight pickup in the pace of output growth. The new orders index climbed four points to 6.9, also pointing to slightly accelerating growth this month. The capacity utilization and shipments indexes rose to 14.0 and 17.3, respectively, their highest readings in nearly a year. The employment index grew to 3.1 from -1.5, marking its first positive reading since January and indicating modest growth in employment. Meanwhile, perceptions of broader business conditions were mixed in July: the general business activity index edged up to -3.0 from -6.1, but remained slightly negative, while the company outlook index increased three points to 5.9, recording its second consecutive positive reading, and the index measuring uncertainty regarding companies’ outlooks climbed to 20.9 from 9.1, with more than a third of manufacturing executives indicating increased uncertainty from June.