Wild weather during May helped dampen service sector activity in the month, even though the sector experienced its seventh consecutive month of expansion.
The BNZ-Business NZ performance of services index had a national reading of 53.3 points, down 0.6 points from April but up 5.2 points from May last year.
A reading above 50 indicates that the sector is expanding and below 50 that it is declining.
In Otago-Southland, the index was 48.3, down 0.3 points on April.
Otago-Southland Employers Association chief executive John Scandrett said the weaker index result for April and May suggested that there was some shoulder-season slippage across the service sector.
Through the closing months of last year and into January and February this year, the index was tracking comfortable within an expansionary band.
The last two monthly surveys in the region had exposed some negative sentiment within the hospitality and finance service areas.
Sluggishness in wholesale activity supported evidence there had been a fall-off in demand for orders generally, he said.
Business NZ chief executive Phil O'Reilly said any hope of stronger expansion in May after the dip in April was always going to be difficult, given recent weather conditions.
"Weather is often a double-edged sword for the service sector, as some businesses depend on fine weather while others enjoy better trading during winter."
However, on balance, the strong concentration of negative comments from respondents showed the wild and wet conditions during May led to a less than ideal month for day-to-day activity for many, he said.
BNZ economist Doug Steel said the national index results tied in with the electronic data that showed a similar pattern of growth consolidation.
Annual growth in the total value of electronic transactions rose by 5% in the first quarter but had eased back to 3.4% this quarter.
"This shape of annual growth is evident for general retailing - durables, apparel and consumables - hospitality, services and non-retailing.
"Overall, the electronic transactions data gives a clear sense of cautious spending behaviour across the economy."
For the service sector, and the economy more broadly, that would constrain growth in the short-term.
But it might be positive in the longer term, by putting what growth there was on a more sustainable footing, Mr Steel said.
The ongoing growth in the service sector appeared strong enough to drive employment higher although that did not mean mass hiring.
The service sector employment index eased back to a seasonally-adjusted 50.8 in May after hitting its highest level since 2007 in April at 54.4.
While still above the 50 level for the sixth consecutive month, it suggested only mild employment growth was occurring in the services sector, he said.