A new report by the Manufacturers Alliance for Productivity and Innovation (MAPI) forecasts that U.S. manufacturing production will expand by 2.2 percent in 2013 and 3.6 percent in 2014.

The figures are upward revisions from MAPI's previous Quarterly Economic Forecast published in November, when the organization predicted manufacturing production growth of 2 percent for 2013 and 3.2 percent for 2014.

MAPI predicts that inflation-adjusted gross domestic product will expand by 1.8 percent in 2013 and by 2.8 percent in 2014, showing no change from its November 2012 report.

"There are several reasons to be optimistic about continued economic growth in 2013 and 2014," said MAPI chief economist Daniel Meckstroth.

"Consumer deleveraging is close to an end; there are definitive signs of improvement in the housing market, especially on the supply side; and there is moderate job growth, pent-up demand and the potential for spending that was previously postponed."

While there are positive signs emerging for the overall U.S. economy, however, political and global headwinds — such as sequestration in the United States and recession in Europe — continue to pose a threat, MAPI says. 

Meckstroth warned that that U.S. consumer spending this year will be restrained by the 2 percent payroll-tax increase, and government at all levels — federal, state and local — is in an austerity mode.

Meanwhile, a confluence of factors could continue to crimp business investment:

• The recessions in Europe and Japan have hurt foreign-affiliate earnings and limited U.S. exports.
• The deceleration of growth in China, Brazil and other developing countries increases risks of a global slowdown. 
• There remains a level of uncertainty about federal policy and the resolution of policy deadlines.

MAPI sees robust growth for high-tech manufacturing over the next two years.

High-tech manufacturing production, which accounts for approximately 10 percent of all manufacturing, will grow by 4.3 percent in 2013 and 9 percent in 2014, MAPI predicts.

Meanwhile, the alliance expects production in non-high-tech industries to increase by 1.8 percent this year and by 3.5 percent in 2014.

Mixed Signals for Job Prospects

MAPI's latest forecast paints a mixed picture for employment.

The organization expects the manufacturing sector to add 87,000 jobs this year, below its November forecast of 163,000 jobs.

Manufacturers will add 289,000 jobs in 2014, according to MAPI's latest forecast, up from the 270,000 in its November forecast.

"Moderate economic growth will allow for some continued but relatively slow improvement in the unemployment rate," Meckstroth said.