Nationally, the BNZ-BusinessNZ Performance of Services Index rose 0.3% to 58.4. Otago-Southland posted 64.6, northern North Island 63.2, lower North Island 54.3 and Canterbury 54.3 points.
Readings above 50 denote expansion, and below, contraction.
Chief executive of the Otago Southland Employers' Association Virginia Nicholls said the Otago-Southland index grew 3.6 points from November to hit 64.6, the second highest result achieved in the last year.
''This completed a very positive year, with the average performance of services index for the past year sitting at 59, the same as 2015,'' she said.
Otago Southland's average activity during 2016 was also 2.4 points higher than the average for New Zealand, which was 56.6 points.
She said tourism had continued to thrive, along with the associated accommodation, cafes and restaurants, but retail trade had reported a lacklustre month, due to increased competition.
Mrs Nicholls said construction industry suppliers reported positive sales, particularly with regard to house renovations.
Although there was some freight disruption because of the Kaikoura earthquake, that was not unexpected, she said.
BusinessNZ chief executive Kirk Hope said the further December expansion ''rounded out a solid year of activity''.
December's 58.4 was the highest result for 2016 with both production/sales at 63.5 and new orders/business at 60.9, remaining about the 60-point mark.
BNZ senior economist Craig Ebert said the index's new orders/business index remained clearly above normal, which heralded sustained strong expansion in sales activity.
