The Otago-Southland region's service industry is struggling but employers' representative John Scandrett says there is no need to panic.
The local performance of the services index fell significantly in June, dropping to 38.7 points from 48.3 in May.
However, the index reading was 36.1 in June last year.
The national index was 55.7 points.
Northern was 58.1, central 51.6 and Canterbury-Westland 46.
A reading above 100 indicates expansion and below 100, contraction.
Mr Scandrett, the chief executive of the Otago-Southland Employers' Association, said the latest June result presented a picture that the services' sector in the south region was struggling.
"I think it is important to note that while the local index reading is the lowest nationally, this is not a case of the South going to `economic-hell-in-a-basket'.
We need to keep firmly in mind that last week we saw Otago-Southland once again lead the country in manufacturing stability."
While commercial benefit was, for the time being, spread disproportionately across key sectors, there were significant positive elements in the regional economic mix, he said.
Across sales activity and supplier deliveries, the June survey yielded negative feelings, but the region was probably seeing a weaker-than-normal shoulder season.
Within the results were references to a mild lift in tourism-focused activities and comments welcoming the arrival of snow.
Retail activity in the region continued to present challenges, Mr Scandrett said.
The service sector had an air of optimism around the anticipated seasonal movement through July and August, once the winter tourism activities generated momentum.
It was hoped those gains would show through in the next survey results, he said.
