The score for the services sector in May was 33.5 points, up from 12 in April but far lower than the 57.6 it scored in January.
A performance of services index reading above 50 indicates that services are generally expanding; below 50 it is declining.
"As most of the service sector was only open for two weeks during May, this result was not a surprise," Otago-Southland Employers Association chief executive Virginia Nicholls said.
Supplier deliveries were just above 40 whereas orders and new business, stocks and inventories, employment levels and sales levels were all below 40 on the index.
"The easing of Covid-19 meant that the service sector was able to restart," Mrs Nicholls said.
"This was a relief for these service providers who were keen to reopen their businesses."
The tourism industry welcomed direct assistance from Government for domestic tourism marketing campaigns, the index said.
The cancellation of several large events affected the sector badly, most notably University of Otago graduation ceremonies.
Once services were able to operate, there were extra costs to meet requirements at Alert Level 2.
Tertiary institutions and secondary schools have had a significant loss of income, Mrs Nicholls said, as many international students were not able to enter the country.
Businesses were now hopeful of a safe transtasman bubble with some Australian states.
"This will help to stimulate new economic opportunities for both New Zealand and Australia."
Positive comments were at 38%, up from zero in April.
"The wage subsidy scheme was instrumental in keeping a number of service providers going during this time," Mrs Nicholls said.
