OTTAWA  - Canadian producer prices fell 1.5 per cent in July from June, the biggest decline in 2-1/2 years, as a stronger Canadian dollar cut the cost of motorized and recreational vehicles, Statistics Canada said on Tuesday.

The drop was the largest month-on-month slump since the 1.5 per cent retreat seen in December 2014. Of the 21 major commodity groups, 18 fell, one increased and two were unchanged.

Prices for motorized and recreational vehicles plunged by 3.3 per cent, the largest fall in more than eight years, thanks largely to a 4.6 per cent gain in the value of the Canadian dollar against the greenback in July.

Many vehicles are priced in U.S. dollars and become less expensive when the Canadian currency strengthens.

The producer price index would have decreased by just 0.4 per cent in July had the exchange rate stayed constant.

Raw material prices slipped by 0.6 per cent from June on lower prices for metal ores, concentrate and scrap.