Statistics Canada cited a "significant decrease" in the energy sector in May, including a 1.2% decline in mining and oil and gas extraction. The report said production of natural gas and, to a lesser extent, crude oil, has been down since the middle of last year.

Economists had been looking for a 0.2% increase in GDP following the previous month's +0.4% reading.

Monthly gross domestic product was down across most of the goods-producing industries, including construction, utilities, and agriculture and forestry. The forestry sector on its own was down 6.2% from the previous month, with the decline attributed to weak U.S. demand and the strength of the Canadian dollar.

Construction fell for the third month in a row, declining 0.4% from April, and is now ahead by just 0.4% on an annual basis. All three components - residential buildings, non-residential buildings and engineering and repair work - declined in May, StatsCan reported.

Manufacturing posted a 0.1% gain on the month but for the past year was down 5.5%. The manufacture of equipment for mining and oil and gas extraction increased for the third straight month in May while motor vehicle and parts production was down 3.6% from the month before.

As a whole, GDP for goods-producing industries was down 0.5% from April and has dropped 3.5% since May of last year.

GDP in services-producing industries was unchanged from the previous month, with declines in wholesale trade, transportation and warehousing, information and cultural industries and finance, insurance and real estate.

Retail trade rang up a 0.1% month-over-month increase and was up 2.5% on an annual basis. There were also gains in arts, entertainment and recreation, administrative and waste management services, education, arts, public administration, entertainment and recreation, health care and social assistance, and accommodation and food services.

While the hospitality sector as a whole was up 0.3%, the accommodations side of the industry continued to suffer, losing 0.3% or $29 million from the previous month. StatsCan said the decline in the number of overnight travellers from the U.S. was the primary cause of the decrease. Meanwhile, food services saw a 0.6% ($113 million) increase.

By Geoff Matthews, This email address is being protected from spam bots, you need Javascript enabled to view it , edited by Nancy Girgis, This email address is being protected from spam bots, you need Javascript enabled to view it

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