National levels on the monthly Business New Zealand performance of services index gained some ground last month, with Otago-Southland the only one of the four regions to decline, plummeting back to low January levels.
The overall national index rose by 0.8 points from February to 47.1 in March - its second consecutive rise.
However, compared to March last year, it remains depressed by 3.7 points, with three of the five sub-indices in contraction.
An index reading above 50 indicates general expansion, below 50 reflects decline.
The respective indexes of Northern, Central and Canterbury/Westland all rose from February to March from between 1.3 to 2.7 points.
Otago/Southland fell 7.3 points from 48 in the month from February to 40.7 in March.
Last year, the region stood well in positive territory at almost 53 points.
Otago Southland Employers Association acting chief executive Diana Hudson said returning university students had given Otago a services boost in February, but that effect had waned in the March indices.
Business New Zealand chief executive Phil O'Reilly said the sector had been in contraction for 12 consecutive months, although there "were a couple of positives to glean from the March results".
The sub-indexes of activity/sales and new orders/business both chalked up their highest values since last July at respectively 47.8 and 51.4 points.
"Two of the main sub-indexes, sales and new orders, recorded reasonably good values compared with those in the last few months," he said.
"As well, the proportion of negative comments received from respondents has continued to drop. But employment activity remains historically weak," Mr O'Reilly said.
The three declining sub-indexes were employment, down to 44.8, deliveries, at 51.4 and stock/inventories, down 2.9 points to 45.4.
Bank of New Zealand senior economist Craig Ebert delivered a cautionary note on the improved figures for sales and new orders, saying it did not mean a turnaround in the sector.
"The wider evidence is of widespread softening in the business sector, including services," Mr Ebert said.
"And while there is a lot of fiscal stimulus in the pipeline, there seems little if any room for more," he said in the BNZ statement.
