Canadian producer prices drop for first time in nine months

Canadian producer prices in May fell for the first time in nine months, dropping by 0.2 percent from April on lower prices for energy and petroleum products, Statistics Canada said on Friday.

Analysts in a Reuters poll had forecast a 0.3 percent increase. Of the 21 commodity groups, prices rose in 17, dropped in three and were unchanged in one.

Prices for energy and petroleum products fell by 3.5 percent, dragged down by declines in motor gasoline, fuel oils and diesel fuel. Excluding this sector, producer prices would have rise by 0.4 percent in May.

Prices for motorized and recreational vehicles rose by 0.3 percent, thanks largely to a 1.2 percent decrease in the Canadian dollar against the greenback in May. Many vehicles are priced in U.S. dollars and become more expensive when the Canadian currency declines.

Raw material prices dropped by 1.8 percent, the largest month-on-month decline since July 2016, thanks to a 5.0 percent drop in prices for crude energy products.

(Reporting by David Ljunggren; Editing by Nick Zieminski)