The region scored 56 on the BNZ-BusinessNZ index compared with 56.3 in Canterbury-Westland, 57 in central (which includes Wellington) and 51.3 in northern (which includes Auckland).
The New Zealand seasonally adjusted index continued to expand in January, ending at 57.9 and edging past December's 14-month high of 57.
A reading above 50 indicates expansion, the higher number the faster the expansion.
The strongest pulse was now coming through production, albeit new orders were still strong.
Otago-Southland Employers Association chief executive John Scandrett said the early part of the manufacturing year in the South was being viewed as positive by most operators in the sector.
Agribusiness activities were a mixed bag of results.
Low-end dairy payments impacting negatively on farmers buying machinery but, with raw milk prices in partial retreat, cheese industry parties were happy.
Pet food manufacturing operators were also relaxed with their situation as the supply of raw material appeared to be "nicely aligned'' to their targeted production requirements.
"Regional manufacturers are, for the most part, maintaining a positive production stance and there are sub-index signs new orders are keeping abreast of the output positions being taken.''
ManufacturingNZ executive director Catherine Beard said the manufacturing sector in New Zealand had been in continued expansion since October 2012.
"More than two-thirds of manufacturers provided positive comments regarding their main influence on business activity, with increased sales both on a domestic and international basis. Other comments outlined the general positive sentiment occurring in the New Zealand economy,'' she said.
BNZ senior economist Craig Ebert said the other agreeable feature of the latest PMI was the stoutness in its employment index.
That gave confidence staffing levels in the sector would continue to expand.
The PMI was published a week after the Household Labour Force Survey which showed annual growth in the manufacturing employment slowed to a bare 0.5% in December.
The survey, more broadly, showed a solid tone, with quarterly jobs growth of 0.9% and 1.4% annually.
The jobless rate fell to 5.3%, a six-year low, he said.