The BNZ-BusinessNZ index showed Otago-Southland second top of the country's four measured regions on 58.3 points, down slightly on the 60 points recorded in December 2012.
Northern was top on 60.1, central was on 48.8 and Canterbury-Westland on 49.9. The New Zealand PMI was 56.4. A reading above 50 indicates expansion and below 50 shows contraction in the sector.
Otago-Southland Employers Association chief executive John Scandrett said a range of buoyant comments was put forward in the December PMI.
In particular, the local food and beverage, packing textiles and pet foods sub-sectors had presented expansionary-focused feedback.
''Supporting comments have, not unexpectedly, been largely based on pre-Christmas stock building activity.''
Within the December PMI sub-indices, production and new orders were strongly in expansion mode but employment and deliveries readings were hovering close to the 50-point break-even mark, he said.
That suggested in the closing stages of last year there might have been a marginally higher-than-anticipated slow-down in manufacturing activity in the region.
Earlier this week, an independent employment confidence survey for the final 2013 quarter delivered news of a slip in Otago-Southland employee job security, job opportunities and earnings.
''Running together, we do see some consistency in these survey results,'' Mr Scandrett said.
BNZ economist Doug Steel said the PMI results suggested the manufacturing sector was ''well and truly'' participating in the broad economic expansion taking place.
According to the quarterly survey of business opinion, the number of manufacturers expecting profitability improvement ahead was at its highest in 10 years, no doubt a significant reason behind the highest level of confidence in the sector over the same period, he said.
''This is not to say all is positive.
Negative respondent comments continue to traverse a softer Australian economy, a high exchange rate generally, including a sharp rise in the New Zealand-Australian dollar cross rate more recently.
''The prospect of higher domestic interest rates over the coming years will likely become more real as the Reserve Bank starts to lift the official cash rate through 2014.''
However, despite those negative factors present and on the horizon, the positive influences across the broad and diverse manufacturing sector were dominating, Mr Steel said.
The balance was as positive as it had been for several years and official data was likely to confirm as much in coming quarters.
