The ASB regional economic scoreboard, for the quarter to March, overall ranks Otago just above halfway within the 16 regions, ASB economist Chris Tennent Brown said.
While retaining the top ranking for employment growth was "positive for the future", there had been a "significant" 13% decline in retail trade and fall in visitor guest nights.
"The late arrival of the winter snow won't be helping the region right now, so fingers crossed for a cold snap and some snow soon," he said.
"Indigestion" from the property market boom was still evident in Otago, with construction outlook "weak" on the back of a 13% decline and a 2.8% easing in house prices, at about $295,000.
Auckland remained top ranked for the seventh consecutive quarter, underpinned by its "relatively strong" housing market, notching up a 0.9% decline and prices at $539,000.
Fifteen of the 16 regions all reflected declining house prices. Nelson booked the best result, no change, at $352,000.
While Southland remained strong in agriculture product prices and had the country's lowest unemployment rate, it was bottom of the 16 regions because of weaknesses in housing, construction, retail, guest nights and car registrations, Mr Tennent Brown said.
Results from the latest, but separate, Hudson report employment expectations poll indicate that as Christchurch rebuilds, hiring intentions in the South Island are strong.
A net 42.8% of employers are planning to increase their levels of permanent resource, up 20.4 basis points compared with levels before the first earthquake in September, Hudson general manager Marc Burrage said in a statement yesterday.
"The rebuild of Canterbury is stimulating New Zealand's national labour market, which is showing improved hiring intentions for the July to September quarter," he said.
A net 22% of employers are planning to increase their permanent staffing levels during the next quarter, up two percentage points from the previous quarter.
Mr Burrage said the building and construction industry was at record-high levels of sentiment in Canterbury, with a net 83.3% of employers planning to hire further permanent staff during the next quarter.
"Additionally, supporting industries like manufacturing, information technology and utilities are also strong not only in Canterbury, but also nationwide, as many resources are diverted south," Mr Burrage said.
There were many influencing factors: the rebuilding in Canterbury, uncertainty cast by ongoing geological activity, the impending Rugby World Cup and national general election, the record-high New Zealand dollar and improving business confidence, he said.
