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* PMI index 55.3 in November against 55.6 in Oct
* New orders stay strong, employment dips
By Leah Schnurr
TORONTO, Dec 2 (Reuters) - The pace of growth in the Canadian manufacturing sector slowed in November after hitting a 2-1/2-year high the previous month, though the key new orders gauge stayed strong, data showed on Monday.
The RBC Canadian Manufacturing Purchasing Managers' index (PMI), a measure of manufacturing business conditions, slipped to a seasonally adjusted 55.3 last month from 55.6 in October.
A reading above 50 shows growth in the sector. After contracting earlier in the year, activity has expanded for eight months in a row.
The forward-looking new orders measure edged down to a still-solid 58 as companies won new clients. As well, the output component rose to 57.1, its highest level since March 2011.
Overall, manufacturing conditions remained favorable in Canada and recent data suggests October's budget impasse in the United States will have only limited impact on fourth-quarter growth south of the border, said Craig Wright, chief economist at RBC. Stronger U.S. growth could increase demand for Canadian exports.
"A slow and steady increase in U.S. growth will play a big role in setting the stage for a continuation in the recent momentum we have seen in Canadian manufacturing activity over the past few months," Wright said in a statement
The employment gauge declined for a second month in a row to 52.8. Investors will get another view of the labor market on Friday when the monthly employment report is expected to show Canada added 15,000 jobs in November.