Strong industrial activity in early 2013 softened somewhat recently but the sector should have enough momentum to continue growth, according to a new report by the Manufacturers Alliance  of Productivity and Innovation (MAPI).

In the first quarter of 2013, GDP increased at a 2.4% annual rate, while manufacturing output grew at a much faster 5% annual rate.

MAPI forecasts that industrial production will increase 3.1% in 2013, an increase from 2.2% in the March 2013 forecast.

A further pickup is likely in 2014, with growth anticipated to be 3.6%, commensurate with the previous report.

Manufacturing production should outperform GDP growth, which MAPI estimates will be 1.8% in 2013 and 2.8% in 2014.

“The superior growth in manufacturing production earlier this year was due to strong growth in housing starts, auto sales, and inventory rebuilding that disproportionately benefits manufacturing,” said MAPI Chief Economist Daniel J. Meckstroth, Ph.D., author of the analysis.

 “When there is a large inventory build in one quarter, however, the gain tends to reverse in the next period and we saw that in March and April. We expect acceleration in the general economy and a rebound in manufacturing production in the second half of this year, but nothing to suggest anything more than a return to modest to moderate growth.”

According to the report, non-high-tech manufacturing production (which accounts for 95% of the total) is anticipated to increase 3% in 2013 and grow by 3.5% in 2014.

High-tech industrial production (computers and electronic products) is projected to expand by 4.4% in 2013. An advance to 6.1% growth is forecast for 2014.