Otago Southland Employers Association chief executive Duncan Simpson said the return of students to Dunedin in February was ‘‘clearly positive for many Dunedin-based survey participants''.
‘‘Although, outside Dunedin, performance was patchy, with mixed results from tourism operators and signs of a slowdown in the construction area,'' Mr Simpson said yesterday.
The Otago index for February rose sharply to 61.1 - up from 40.9 in January - and well ahead of the national result of 55.6, recovering strongly from two consecutive months of decline.
The wide-ranging service sector of 10 industries includes wholesale and retail trade, accommodation, cafes and restaurants, transport and storage, construction, property, business and health and community services.
Business New Zealand chief executive Phil O'Reilly said it was pleasing to see that the February results showed some recovery from the lower levels of activity during the Christmas and holiday season.
However, respondents highlighted increasing economic uncertainty and a general slowdown in activity.
‘‘Inflationary pressures and current interest rate levels were also mentioned, two issues that will not ease anytime soon,'' he said in a statement.
An index reading above 50.0 indicates the service sector is expanding, below 50.0 a decline.
Mr Simpson said individual comments on local business conditions showed a 55% positive weighting for February, but recruitment and staffing difficulties continued as the main negative influence.
Otago's gain was followed by the Canterbury/Westland region, up at 60.2.
The Northern region result, 52.8, was almost identical to January's, while the Central region showed moderate growth at 55.6.
