BOONE—Western North Carolina’s economic health improved in July, posting a 0.4 point gain, marking the third monthly increase in a row and halting a two-month slide.

The index, compiled by the Center for Economic Research & Policy Analysis at Appalachian State University, tracks the level of economic activity in 25 western North Carolina counties.

“We’ve recorded considerable gains in regional economic activity over the past three months,” said Dr. Todd Cherry, director of the Center for Economic Research and Policy Analysis. “It’s the best three-month period in more than two years. The question is, will it continue and will this translate to better labor market conditions.”

Seasonally adjusted employment for WNC decreased slightly by less than 0.1 percent in July, providing the first ...