A strong performance from manufacturers is set to lead to better balanced growth in the year ahead, according to the Engineering Employers Federation.
But, the EEF warns that one fifth of manufacturers expect to be hit by reduced orders due to spending cuts.
The EEF says the manufacturing sector will be spurred on by solid growth in export orders, particularly from emerging markets.
EEF regional director, Andy Tüscher, said: “Manufacturing now looks set to be at the heart of the rebalanced growth the economy needs with sectors most exposed to international markets likely to post the highest growth.
“But there are continuing risks to growth both here and abroad. To maintain momentum the government must keep its foot down on policies to accelerate growth.”