Otago's quarterly ranking of economic performance has slipped from top province in the country to almost middle of the pack, but only because it is at full capacity from strength in the tourism and construction sectors.
Nelson, Tasman and Waikato are respectively first, second and third on the ASB's regional economic scoreboard for the quarter to December. Otago slipped from first to seventh, and Canterbury and Southland switched places from the previous quarter to become respectively 15th and 16th.
ASB rural economist Nathan Penny said while Otago's reign at the top of the rankings was shortlived, its decline was not because the region had slowed.
''It simply can't grow at the rates it has been, and capacity constraints are having an impact,'' Mr Penny said.
As an example, he said annual growth in guest nights had slowed, as hotels were hitting full capacity.
'Try finding a cheap room in Queenstown these days,'' he said.
Otago Southland Employers' Association chief executive Virginia Nicholls said Otago was ''still thriving'', especially in tourism and retailing.
The annual growth for the quarter to December 2016 was ''very positive''. Employment was up 2.4%, retail sales up 7%, new car sales up 7%, house prices up 21% and construction had increased 15%, she said.
''Tourism has continued to thrive, with a high number of tourists visiting along with a healthy cruise ship season,'' she said.
Hotels in Queenstown and Wanaka were near full capacity, which was having a spin-off for Invercargill and Gore, as some tourists were overnighting there after visiting Queenstown.
''This has flowed on to strong retail sales, which are up by 7% on the year before,'' Mrs Nicholls said.
Mr Penny said all Otago's visitors were ''helping keep the cash registers ringing''.
Nationally, while construction took a dip for the quarter, that was mainly because of the timing of commercial projects and Mr Penny said construction would continue to drive economic activity.
He said the construction pipeline around Otago ''remains healthy'' and the value of residential permits was up strongly on a year ago.
''While non-residential consents are high, they're off their recent peak,'' Mr Penny said.
However, the level of consents during the past year should keep the construction sector ''very busy''.
Mrs Nicholls said there was a significant construction boom in the region. Residential and commercial building was at a high.
Otago's house prices were ''charging ahead'' Mr Penny said, lifting 21% during the past year, and while turnover was down on a year ago, that was less than in main centres.
He said tougher lending restrictions, imposed on banks by the Reserve Bank, were affecting Otago's housing market.
''These restrictions may well continue to be a damper on residential activity in the region over the coming quarters,'' Mr Penny said.
Southland was languishing at 16th. Its retail and construction sectors had been particularly hard hit, but a ''shot in the arm'' was expected for Southland with rising dairy prices, Mr Penny said.
While the level of activity in Canterbury remained high, Mr Penny said tourism had ''gone backwards'' in terms of guest night numbers.
Mrs Nicholls said Southland was not achieving as well as other regions, which was not surprising, considering farming across the board had been struggling, but the news was not all bad.
The annual growth until the end of December 2016 was positive.
Employment was up 2.8%, retail sales up 4%, house prices increased 7% and new car sales were up 3%.
While Southland had struggled with construction, down 7% during the past year, Mrs Nicholls said some projects were now under way which should start a turnaround.
