Help-wanted classified ads, an indicator of labor demand, were down in July compared with the previous month in all parts of Virginia except the Hampton Roads area and the southwestern part of the state, according to the University of Virginia's Tayloe Murphy Institute.

Want-ad linage was up compared with the same period a year ago for all areas of Virginia, the institute reported.

In Northern Virginia, the institute's help-wanted index was down 9 percent from June, from 179 to 163, the second-largest decrease in the state. The west/central area, which includes Culpeper, Charlottesville and Staunton, had the largest decline, dropping 31 points, or 19.5 percent, from the June figure of 159. The base figure of 100 is for 1980.

"It's typical to have a slight decline at the end of the summer, but usually not of this magnitude," said Donald W. Lindsey, a research assistant for the institute. Whether this is the start of a longer decline or just a one-month dip is difficult to tell, he said.

The want-ad index is based on a monthly study of 20 daily newspapers, not including The Washington Post.

Atlantic Research Corp., an Alexandria-based maker of rockets, and its partner, the applied technology division of TRW Inc., have won a continuation on their contract to produce the rocket motor for the Tomahawk Cruise Missile. The $20 million contract for 247 motors and spare parts is the largest ever awarded by the U.S. Navy's Joint Cruise Missiles Project office. The contract is a "very important" one for Atlantic Research, which earned $9.9 million last year on sales of $176 million, according to a company spokeswoman.

Additionally, the U.S. Information Agency awarded Atlantic Research a $1 million contract to develop a detailed plan for the installation of a new radio relay station that the Voice of America will build in Tangier, Morocco.

The Virginia Department of Labor and Industry has reported mixed results in its market basket survey for the month of August.

In its monthly comparison of prices for 71 foods, including meats, fruits, vegetables, peanut butter and milk, the department found a decrease in more than half of the items in the Richmond area.

Officials said 35 of the 71 grocery items registered decreases in August, while 28 items were higher and eight remained unchanged. The cost of meats such as bacon and pork sausage increased, while that of round steak, tuna fish and hamburger declined.

In the Norfolk area, shoppers paid lower prices for 32 items, higher prices for 31 items and the same price for eight items. In Northern Virginia, prices were higher for 31 grocery items, lower for 21 and the same for 17.

The retail food prices are collected each month by employes of the labor and industry department.

Blake Construction Co. Inc. has won a $9.5 million contract to build the energy plant and central maintenance facility of the Somerset Prison, a medium/maximum security prison in Somerset County, Maryland.

The award is the second major contract Blake has won at the prison. In June, Blake was awarded a $31.7 million contract to build eight housing units there.

Eastern States Exploration Co., a privately owned, natural-gas drilling company based in Alexandria, has signed a spot market contract to supply Citizens Resources Corp. with natural gas.

Citizens Resources Corp. is a subsidiary of Citizens Energy Corp., a Boston-based nonprofit energy company that uses its resources to help the poor and elderly with their energy needs.

The spot market contract will supply Citizens with as much as 8 million cubic feet of gas per day, the company said.

The directors of The Bank of Middlesex in Urbanna, Va., have reached an agreement to be acquired by First Virginia Banks Inc. of Falls Church.

The agreement provides for Middlesex shareholders to receive 2.3 shares of First Virginia Banks Inc. common stock for each share of Middlesex stock. There are 232,320 Middlesex shares outstanding.

The Bank of Middlesex has total resources of $68 million and operates three offices in Middlesex County, and one in King and Queen County.

First Virginia is a multi-bank holding company with total resources of $2.8 billion.

The president of the Virginia Association of Realtors reported increased home sales for July and said that business is good statewide.

Home sales in July were up 28 percent over July 1984, with 6,853 homes sold compared with 5,335 the year before.

"With mortgage-interest rates down five points from their peak of three summers ago, people definitely seem to feel that this is a good time to buy a home," said Fred Hetzel, the group's president.

Virginia Power has purchased hand-held computers that will reduce by two days the time it takes to read a meter and mail a bill, utility officials have announced.

The computers also will make monthly bills more accurate, officials said, by warning a meter reader when a reading is significantly higher or lower than the same time last year.

"This latest state-of-the-art electronic equipment is now being used by our meter readers in Norfolk, and on the Peninsula as of Aug. 26, with all area districts scheduled to be included by the end of October," said William Blackwell Jr., a Virginia Power spokesman.

The meter-reading device is a portable hand-held computer weighing about three pounds. The meter reader will press buttons to store information on a small cassette tape.

In another development involving the company, Virginia Power has shelved plans to build a coal-water fuel plant and instead is pursuing plans for a plant to turn coal into synthetic gas, utility officials said recently.

The company has estimated the cost of the coal-gasification plant at $450 million, but its completion is expected to hinge on support from the U.S. Synthetic Fuels Corp.

The proposed coal-water fuel plant was dropped because it failed to win financial backing from that quasi-governmental agency, which is not financing coal-water fuel projects, according to a Synfuels Corp. spokeswoman, Karen Hutchison.

Coal-water fuel mixtures can be used as a substitute for oil in oil-fired boilers. The coal-water project was one of six new technologies that Virginia Power targeted for further development last October.

Samuel C. Brown Jr., the utility's senior vice president for technical assessment, said Virginia Power has spent about $140,000 on the coal-slurry project to date.

Maryland's Department of Economic and Community Development has decided to provide $75,000 in loans to two businesses in Baltimore's Park Circle Enterprise Zone.

DECD officials have announced that $50,000 will go to American Bureau Publications of Maryland Inc. for start-up and working capital. The company, which expects to hire 27 people over the next three years, publishes directories of Better Business Bureau members and has several out-of-state editions.

Another $25,000 will be loaned to the Baltimore Lighting Supply Co. for use as working capital and a line of credit. The electrical products wholesaler expects to double its employment from six to 12 within the next three years.