The service sector nationally contracted slightly during January, and just remained in expansion mode for the start of 2011 - but Otago Southland fared poorly.
In the monthly BNZ and Business New Zealand performance of services index, readings above 50 denote expansion, and below 50 contraction.
Nationally, the index for January fell from 52.1 to 50.8 Unlike last week's manufacturing index where Otago was well ahead of the other three regions with a high level of expansion, Otago's service-sector data slumped from an index reading of 61 in December to 46.3 in January, rating slightly ahead of Canterbury-Westland on 44.7 and behind Central on 49.3 and Northern at 50.8.
Otago Southland Employers Association chief executive John Scandrett said the Otago Southland slump from the spike of 61 in December to 46.3 for January was "disappointing but not surprising".
"The January survey outcome drives home, again unfortunately, widespread negativity across construction, tourism, and finance servicing activities and wholesaling agents are telling us the intermediate forward picture does not present positive prospects," Mr Scandrett said in a statement.
There are probably some sub-sectors, such as tourism, where southern businesses are holding their own, but even there we see references to unseasonal wet weather and lack of tourist numbers preventing growth potential.
"We will continue to hold a conservative viewpoint on service index outcomes for some months yet," he said.
BNZ senior economist Craig Ebert described the overall January performance as "lacklustre", but noted only one of the five sub-indices was in decline for the period.
While the employment index contracted to 47.8, there was "encouraging" expansion in new orders-business at 54.8, stocks-inventories at 51.0, activity-sales 50.3 and supplier deliveries at 50.2, he said.
"The South Island also experienced a fall in activity, " Mr Ebert said in a statement yesterday.
