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Just like last week's BNZ-BusinessNZ manufacturing index, in yesterday's services index, employment shortages dragged down the overall points to 49.6 - points under 50 reflect contraction, above 50 indicates expansion.
And as with manufacturing, the services index was the lowest of the four regions across the country - although all of the other three scored just above 50.
Nationally, the services index fell 4.3 points from May, to 52.8.
Otago Southland Employers' Association chief executive Virginia Nicholls said the southern score of 49.6 points indicated little change and was only slightly down on the same time last year.
However, it was down on last year's average of 59.7, she said.
``There continues to be skill shortages with both skilled and unskilled staff.''
The southern regional breakdown in categories saw orders/new business and activity/sales levels in expansion at 53.6. Supplier deliveries were unchanged, and stocks/inventories and employment levels declined.
Nationally, employment was on the fence at 50 points, where it has been sitting for the past four months.
BusinessNZ chief executive Kirk Hope said national employment remained at the ``no change'' level, and was the lowest result to that sub-index since January 2013.
Mrs Nicholls said southern tourism operators had a positive start to the winter season, helped by improved winter weather conditions, prompting a busy start to the ski season.
``[However] immigrant workers are crucial, particularly in Central Otago.
``Their visas are taking longer to process, which is slowing down the availability of these staff.''
She said the proportion of positive comments in June were at 50%, a decline from May's 63% of positive comments.
There were a number of conferences and events coming up in Otago Southland, and accommodation providers, cafes and restaurants supporting those events were reporting good occupancy and sales, Mrs Nicholls said.
The Government's proposed amendment to the employment relations Bill was concerning employers, who believe the changes will make it harder to do business, she said.
She highlighted examples such as proposals to remove the 90-day trial periods from businesses with more than 20 employees, allowing union representatives workplace access without permission and forcing businesses to settle collective agreements, even if they can not reach agreement.