The region's index lifted to 47.2 points in August where above 50 is expansionary and below 50 is a contraction.
Otago-Southland Employers Association chief executive John Scandrett said the slow but positive tracking pattern was welcome.
"While we here are still theoretically behind the national services index reading [51.4] which is just a shade on the right side of the expansionary band, we are performing closely to what is being seen in neighbouring regions.
"It is really only the Auckland area where the August outcome has moved comfortably beyond the 50-point threshold."
In Otago-Southland, survey comments ranged from positive winter-based tourism sector business activity continuation to the more negative recognition of slowing wholesale sector ordering and sharper competitive pricing positioning across the construction industry, Mr Scandrett said.
The northern index reading was 54.3 points, central was 49.7 and Canterbury-Westland was 46.4.
The Canterbury-Westland results were collected before the earthquake and Business NZ chief executive Phil O'Reilly warned results in coming months might not be as favourable.
While comments from manufacturers in the region indicated many had been relatively unscathed by events, many in the service sector might not have been as fortunate, he said.
BNZ economist Craig Ebert said while the result was not the most encouraging, it could have been much worse.
"Yes, the New Zealand household sector faces a period of painful rebalancing, especially with the housing market likely to remain in the deep freezer for the foreseeable future."
However, there had been an improving labour market, along with a "fairly chunky" tax cut, coupled with fixed-income top-ups to compensate for higher GST.
Also, farming incomes had been improving through good international prices and there had been some recovery from the drought, he said.
The averages were still positive and there seemed enough in the pipeline to keep it that way.
