OTTAWA, July 22 (Reuters) - Signs of life in the struggling auto sector helped boost Canadian retail sales by 1.2 percent in May from April, outstripping expectations and more than offsetting April's 0.6 percent decline.

Statistics Canada said on Wednesday 22 July that seven of eight sectors saw increased sales, while the eighth, clothing and accessories, was unchanged. Analysts surveyed by Reuters had predicted, on average, an increase of just 0.5 percent.

The automotive sector had been a drag on sales and was still down a whopping 16.5 percent on the year. But this year it has shown some recovery from huge drops in November and December, and in May sales rose by 2.4 percent. Sales at new car dealers rose by 3.4 percent, led by truck sales.

Excluding auto sales, the retail sector advanced by 0.7 percent. Building and outdoor home supplies, food and pharmaceuticals were other leaders.

In volume terms, overall sales rose by 0.7 percent. Year on year, the value of sales was down 4.9 percent, and 3.3 percent excluding auto sales. All figures are seasonally adjusted. On Monday 20 July, Statscan had reported a 0.3 percent fall in wholesale trade for May, better than expected but still negative. (Reporting by Randall Palmer)