Manufacturing production is expected to grow 3.1% in 2013, says a new economic forecast, as improving fundamentals point to a stronger U.S. economy by the end of 2013 and into 2014.

The Manufacturers Alliance for Productivity and Innovation (MAPI) quarterly economic forecast raised its prediction for manufacturing growth from 2.2% in its February forecast, but did not change its prediction that manufacturing production will grow by 3.6% in 2014.

MAPI said the overall U.S. GDP is expected to grow 1.8% in 2013 and 2.8% in 2014.

Why the improved outlook for manufacturing? MAPI Chief Economist Daniel Meckstroth said: “Consumer deleveraging is close to an end and households have the capacity to use more credit; housing prices are rising and with that change comes a virtuous cycle of increasing wealth, consumption, and income that feeds back into more housing activity; pent-up demand is releasing postponed spending for consumer durable goods; and the job market is repairing itself—employment growth is more balanced among the various sectors.”

The improvement comes, Meckstroth says, despite the damping effects of “wages rising slower than inflation;  wages rising lower than inflation; spendable income being reduced by higher taxes; government austerity worsening as sequestration cuts are reflected in spending reductions; and negative net exports both this year and next.”

While predicting that production in non-high tech industries would increase 3.0% this year, MAPI said high-tech manufacturing, which accounts for roughly 10% of U.S. manufacturing, will grow 4.4% this year. For 2014, MAPI expects high-tech manufacturing to expand 6.1%, while other production will rise 4.4%.

Looking at investment in equipment and software, MAPI predicts growth of 5.6% in 2013 and 7.4% in 2014. Spending on information processing equipment will rise 6.3% this year and climb to 8.0% in 2014, MAPI expects.

Export growth will be modest in 2013, MAPI predicts, with an increase of 2.0%, rising to 4.5% in 2014.

With economic improvement forecast, MAPI raised its prediction for growth in manufacturing employment, from 87,000 in its February forecast to 137,000 additional jobs in today’s quarterly forecast. It also raised its employment growth outlook for 2014, from 289,000 to 352,000 additional manufacturing positions.