Production Associates inspect cars moving along assembly line at Honda manufacturing plant in Alliston, Ontario March 30, 2015. REUTERS/Fred Thornhill

OTTAWA, April 3 (Reuters) - The pace of growth in the Canadian manufacturing sector rose in March for the sixth month in a row as production and new orders picked up, while employment hit its highest level in close to five years, data showed on Monday.

The Markit Canada Manufacturing Purchasing Managers’ index (PMI), a measure of manufacturing business conditions, increased to a seasonally adjusted 55.5 last month from 54.7 in February.

A reading above 50 shows growth in the sector.

The figures were the latest to point to a strong start to the year for Canada after better-than-expected growth in January put the economy on track for a solid first quarter.

Companies said they saw stronger domestic demand in March, particularly among the energy sector, which is recovering from the collapse in oil prices.

That helped new orders edge up to 56.4 from 56.0, though new export orders were unchanged at 51.0. The measure of output rose to 56.7 from 55.2.

Employment rose to its highest level since June 2012 at 54.6 from 54.3, which could bode well for the wider labor market report due on Friday. ECONCA

But input prices also rose as companies were pinched by the strong U.S. dollar and higher raw materials prices. The index was up at 63.7 from 61.3.