Canada's seasonally adjusted Ivey purchasing managers' index dropped to 55.9 in May from 62.3 in April. Analysts had expected the index to decrease to 55.0.
A reading above 50 indicates a rise in the pace of activity, below 50 indicates a contraction in the pace of activity.
The supplier deliveries index was 48.8 in May, while employment index was 50.7.
Inventories index was 48.9.