TORONTO, June 5 (Reuters) - Canadian economic activity

expanded at a faster pace in May and inflation pressures heated

up, Ivey Purchasing Managers Index (PMI) data showed on Friday.

The seasonally adjusted index rose to 58.2 from 57.7 in

April, marking the highest level since September.

The Ivey PMI measures the month to month variation in

economic activity as indicated by a panel of purchasing managers

from across Canada. A reading above 50 indicates an increase in

activity.

* The gauge of employment dipped to an adjusted 54.3 from

54.7 in April.

* The adjusted prices index was at 78.0, up from 76.6.

* The unadjusted PMI edged lower to 61.3 from 61.5 in April.