Southland retailers are "treading water" and face a static economy for months to come, despite an increase in regional spending last month.

Figures released by Paymark, which processes about 75 per cent of all electronic transactions in New Zealand, show Southland spending last month increased 1 per cent on spending in February 2012.

Southlanders spent $94.9 million through Paymark this February, compared with $94.0m spent in February 2012.

Canterbury recorded the largest increase in regional spending, growing 4.6 per cent from $414.6m to $433.6m.

Growth was also high in Otago, where spending increased by 4.0 per cent, and in South Canterbury, which logged a 3.4 per cent increase.

Nationally, the value of spending increased by 1.8 per cent, jumping from $3727.9m in February 2012 to $3794.4m in 2013.

Southland Chamber of Commerce chief executive Richard Hay said the 1 per cent increase in spending was negligible across the Southland retail sector, especially when rising inflation was taken into account.

"We're barely at the moment treading water. There's a lot of caution out there."

Southlanders were still wary about the economic future, and spending would likely reflect this for months to come, he said. "It will be pretty steady as she goes until there's a better understanding of the situation of a lot of people's positions, including at the smelter."

The growth of spending in Otago could have been affected by the number of students returning to Dunedin in February to begin studies, he said.

Spending in all regions increased during February, except in Gisborne where it remained static.

- © Fairfax NZ News

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