* PMI index slips to 53.5 in Dec from 55.3 in Nov
* Pace of new orders, employment cool
TORONTO Jan 2 An index measuring the pace of
growth in Canada's manufacturing sector pulled back to a
four-month low in December as the rate of new orders and
employment cooled, data showed on Thursday.
The RBC Canadian Manufacturing Purchasing Managers' Index
(PMI), a measure of manufacturing business conditions, fell to a
seasonally adjusted 53.5 last month from 55.3 in November.
A reading above 50 shows growth in the sector. Manufacturing
activity has been expanding for nine months in a row. It hit a
2-1/2-year peak in October.
The forward-looking new orders component slipped to 55 from
58, while the employment measure dipped to 51.6 from 52.8.
Investors will get a broader look at the labor market with
the monthly unemployment report due next week.
Still, the manufacturing sector should gain momentum in
2014, said Paul Ferley, assistant chief economist at RBC.
"Our outlook for 2014 is underpinned by the assumption that
Canadian exports will firm as the U.S. continues on a path of
recovery - this will provide a healthier environment for
manufacturing to further grow in the new year," Ferley said in a
Input costs rose to the highest level in nine months, with
the index climbing to 56 from 53.6. Companies reported higher
fuel and raw materials prices, as well as unfavorable exchange
rates that pushed up the costs of imports.