But adding to concerns about Brexit and China-US trade tensions is the possible effect of the proposed capital gains tax on the sale of businesses.
Otago Southland Employers' Association chief executive Virginia Nicholls said in the southern breakdown by categories, production levels, stocks of finished products and employment levels were all in expansion, while new orders and deliveries of raw materials were unchanged.
Points above 50 reflect expansion and below, contraction.
Otago and Southland's manufacturing for March is 55.2 points, up from 53.3 in February.
Nationally, the BNZ-BusinessNZ performance of manufacturing index slipped 1.5 points to 51.9 for March.
Otago Southland ranked second to the lower North Island's 58.3 point score, while Canterbury West Coast was in contraction, on 48.2 points.
BusinessNZ's executive director for manufacturing Catherine Beard said the slow level of national expansion for March was below the long run average of 53.4 for the survey.
She said in the main sub-index values, production was down to 51.4 and new orders down to 52.5 from February, but employment rose slightly to 51.9, the only sub-index to improve from February.
Mrs Nicholls said the proportion of positive southern comments were above 60%, which was up on last month.
"Manufacturers across the region are reporting a steady workload," she said.
However, for exporters "significant concerns" remained over Brexit and US-China trade tensions.
There were also rising concerns over the proposed capital gains tax.
"There are, however, opportunities for exporters with the Comprehensive and Progressive Trans Pacific Partnership," Mrs Nicholls said.
