BNZ senior economist Doug Steel said the BNZ-BusinessNZ monthly national data fell 0.9 points to a seasonally adjusted 56.9 points, but with "robust growth'' into the second quarter, with sales activity and new orders particularly strong. Both their index levels were above 60.
Scores above 50 reflect expansion and below 50, contraction.
Otago-Southland's services sector had contracted from its high in February, but for May came in with "solid levels of activity'' at 56.7, Otago Southland Employers' Association chief executive Virginia Nicholls said.
Last week's separate manufacturing index, also by BNZ-BusinessNZ, saw Otago-Southland decline into contraction, below 50 points, but nationally was up slightly at a healthy 57.1 points.
Mrs Nicholls said southern construction and health and community services had experienced positive results.
"Most tourism operators reported encouraging results but some have experienced declines, which lines up with the expected tourist shoulder season,'' she said.
BNZ senior economist Craig Ebert said while the services index slowed slightly, it remained very much on the right side of its long-term average of 54.
"This, along with the [national] performance of manufacturing index beaming at 57.1 in May, made for a composite index still consistent with above-average rates of gross domestic product expansion,'' he said.
He noted production and new orders still lead the way for both indices, but now their composite indices on employment had also strengthened to above normal.
Mr Steel noted the "extreme weakness' in dairying was being off-set by tourist spending, while there had been "buoyant returns'' from forestry, beef, kiwi fruit, apples and wine.
BusinessNZ chief executive Kirk Hope said both activity/sales, at 60.6, and new orders/business at 60.1, continued above the 60-point mark, while employment at 54.5 points was at its highest level since November 2015.
