The National Bank quarterly regional trends survey showed nine regions in negative growth and five with rising activity.
Waikato (up 0.3%), Hawkes Bay (0.55), Otago (0.6%), Wellington (1.2%) and Bay of Plenty led with 1.4% growth, according to Steve Edwards of the bank's economic division.
"The largest quarterly fall was measured on the West Coast, where economic activity slumped 3.1% from three months earlier," Mr Edwards said in a statement.
For year-on-year economic activity, Otago ranked fourth of 10 areas in positive growth at 1.6%, sitting midway between Hawkes Bay (0.1%) and leader Taranaki (2.6%). Only Auckland and the Manawatu-Wanganui regions appeared in the red on both the quarterly and year-on-year economic activity reports.
The National Bank survey covered the same period as an Otago Chamber of Commerce survey, which it reported was its most negative in 10 years, with 30% of businesses expecting further deterioration.
In a BNZ confidence survey, 40% expected the economy to worsen.
Mr Edwards said Otago recorded the third strongest rise in retail sales, up 0.8%, guest accommodation nights rose 0.7% against an almost 1% national decline and home sales were twice the national average, rising 12%.
However, Otago employment lost the previous quarter's 2.3% gain, the sale of lifestyle blocks fell 19% and farm sales fell 29%.
"Measures of business and consumer confidence in Otago both fell short of their respective national averages," he said.
The Business New Zealand manufacturing performance index also delivered its worst report in a decade, with 67% nationally being negative on current conditions.
In Otago, 52% were negative, albeit with a better overall result well above the national index score.
