After a mid-2010 slump, there were October gains, then November losses, before the sector "rebounded strongly" in December to finish the year on a robust note, Deloitte partner in corporate finance Paul Munro said.
"The Deloitte South Island index increased by $156 million, or 3.9%, during the last quarter of 2010, with the largest increase in market capitalisation coming from Ryman Healthcare, Skellerup Holdings and Cavotec MSL Holdings," Mr Munro said.
There are eight sectors covering 28 listed southern companies on the index, with total market capitalisation of $4.1 billion.
The most worrying trend of all eight sectors was the booking of a third successive quarterly fall for the retail sector, down 5.4%, although Kathmandu Holdings gained 6.5%.
"Clearly the retail sector has been hard-hit by the aftershocks in Canterbury and the ongoing issues with repairing damaged premises. But with retail continuing to be soft nationwide, this sector may be slower to recover than others," Mr Munro said.
He said the latest index offered some hope brighter times were ahead, particularly after the region's turbulent times during the latter part of 2010.
"No-one could argue that 2010 has been a tough year for the South Island economy.We have endured the impact of the global financial crisis, the Christchurch earthquake and then the Pike River tragedy," Mr Munro said.
"We're hopeful of seeing continued growth in 2011."
The first two quarters of 2011 should reveal the true effect of the earthquake, with cause for optimism, particularly as EQC and insurance payments begin filtering through the economy and the rebuilding begins.
The largest of market capitalisation increases were from Ryman, up $115 million or 11.1%.
Skellerup was up $47.8 million, or 26.6%, and Cavotec grew $41.4 million, or 24.1%.
New Zealand Wool Services International recorded the largest gain in percentage terms, up 34% for the December quarter.
"The New Zealand Wool result is particularly significant because of the importance of the wool-growing industry to the South Island economy, and reflects wool prices which are at a 14-year high on the back of increased global demand for New Zealand wool," Mr Munro said.
Of the 12 companies to suffer falls, the largest in dollar terms was Lyttelton Port of Christchurch, down $24.5 million or 10%, while notable percentage declines included New Zealand Windfarms, down $17.3 million or 25%, The National Property Trust, down $18.6 million or 18% and Dunedin-based Pacific Edge, down $6.5 million or 17%.
The industry results for the December quarter were mixed, with half recording growth and the other half falls.
• The index was amended to take account of the suspension of share trading in Pike River Coal's shares after the November mining disaster and subsequent receivership, and the delisting of Canterbury Building Society, which is now a partner in the proposed "heartland" bank.
