Canada's economy contracted at a faster pace than expected in May, according to figures released Friday.

Statistics Canada said Canadian gross domestic product fell by 0.5 per cent in the fifth month of 2009 as the country's manufacturers and oil pumpers led the reverse economic charge.

Analysts were thinking the national economy would slip for the month, but only by 0.3 per cent.

"Over the last four months, the goods-producing industries have contributed the most to the decrease in real GDP, while the output of the service sector has remained essentially unchanged," said Statistics Canada in a press release.

By comparison, April saw Canada's economy contract by 0.2 per cent on a revised basis.

Overall, Canadian GDP will tumble for the current year, according to the Conference Board of Canada.

The Ottawa-based business think tank predicts that the country's economy will shrink by 2.7 per cent, after subtracting inflation, in 2009.

But, the Conference Board said in its most recent forecast, that Canada will see an economic expansion of 2.8 per cent in 2010.

Manufacturing malaise

Canada's goods-producing sector continued a long-term losing streak in May as manufacturing activity fell by 1.6 per cent in May compared to April. Since May 2008, however, manufacturing GDP has contracted by a hefty 15.8 per cent.

The automobile segment, hard hit by the recession, has decimated Canadian manufacturers.

Statistics Canada noted that approximately half of the manufacturing decline in May was attributable to fewer cars and trucks getting built and sold in this country.

"About half of the decrease was due to a 21 per cent drop in motor vehicle manufacturing, following three months of recovery, and an 8.2 per cent decline in parts production. The temporary closure of two assembly plants, combined with the discontinuation of the production of a model line in Canada, contributed to this decline," the agency said.

As North American car makers start up idle plants, the contraction in the automobile segment could moderate, experts have said previously.

Oil slick

Petroleum producers also did less work in May, according to Statistics Canada.

Output in the sector dropped by 2.3 per cent, the fourth consecutive month in which activity among energy firms slipped in Canada.

Comparing year-to-year, that portion of Canada's GDP attributable to oil and gas production was eight per cent smaller in May 2009 versus May 2008, Statistics Canada said.

In fact, of all the segments followed by Statistics Canada, only non-durable manufacturing (0.2 per cent), health care (0.2 per cent), real estate and finance (0.4 per cent), retail (0.6 per cent) and government administration (0.1 per cent) posted gains in May.