Texas factory activity remained sluggish in July, according to a survey released Monday by the Federal Reserve Bank of Dallas.
 
"The results of the July Texas Manufacturing Outlook Survey are in line with other regional data, which suggest the state economy has hit a slow patch after growing vigorously in the spring months," said Pia Orrenius, a Dallas Fed economist.
 
"By all accounts, downward pressure on economic activity is coming largely from outside the state in the form of declining stimulus from the federal government, financial market uncertainty and some international weakness," she said.
 
The survey's production index rose back into positive territory in July after going negative in June for the first time since October.
 
But indexes tracking new orders and the growth rate of orders fell deeper into negative territory, "indicating a further contraction of demand," the Dallas Fed said. The capacity utilization index fell into negative territory for the first time in nine months.
 
A positive number means more survey respondents reported an increase than a decrease. A negative number means more reported a decrease than an increase.
 
Luke Bellsnyder, executive director of the Texas Association of Manufacturers, said the survey results were in line with what his membership is seeing. But he also pointed out that Texas has been gaining manufacturing jobs in recent months.
 
"We're certainly not any worse off than other manufacturing states," he said.
Survey indexes designed to reflect six-month expectations of manufacturers continued to fall, the Dallas Fed said.
 
Future production, capacity utilization and shipments indexes all fell again in July, although they remained comfortably in positive territory.
 
The regional Fed bank said it collected survey responses from 99 Texas manufacturers between July 13 and July 21.
 
It calculated survey indexes by subtracting the percentage of respondents reporting a decrease from the percentage reporting an increase.
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