U.S. manufacturing is poised for steady growth through 2016, according to the quarterly Manufacturers Alliance for Productivity and Innovation U.S. Industrial Outlook, a report that analyzes 27 major industries.

Manufacturing industrial production increased at a 4 percent annual rate in the first half of 2014 (and 5 percent in the three months ending July 2014) while inflation-adjusted GDP grew at a 0.9 percent rate.

The MAPI Foundation forecasts manufacturing production growth of 3.4 percent in 2014, 4 percent in 2015, and 3.6 percent in 2016. The 2014 forecast is an increase from 3.2 percent and the 2015 forecast is consistent with the June 2014 report. Manufacturing will continue to grow faster than the overall economy.

“The proximate cause for faster industrial growth is that demand has shifted toward manufactured goods,” said Daniel Meckstroth MAPI economist. “Durable goods, equipment, and construction have long lives and therefore are temporarily postponable, especially during economic downturns and times of uncertainty.” He noted that the rebound in big-ticket consumer spending is supported by employment gains, households’ low debt burdens, and rising consumer wealth.

Meckstroth sees several growth themes creating an incentive for business investment, including energy infrastructure, residential and nonresidential construction, transportation equipment, and medical supplies and equipment.

The report offers economic forecasts for 23 of the 27 industries. MAPI anticipates that 19 will show gains in 2014, three will remain flat, and only one—paper production—will decline. Growth leaders include construction machinery with 11 percent annual growth and housing starts with 10 percent.

The outlook brightens further in 2015, with growth likely in all 23 industries, led by housing starts at 29 percent and aerospace products and parts at 10 percent. Meckstroth offers an initial forecast for 2016, when all 23 industries are predicted to show gains. Housing starts should continue its strong advance with 18 percent growth, followed by electric lighting at 13 percent and private nonresidential construction at 12 percent.

According to the report, non-high-tech manufacturing production (which accounts for 95 percent of the total) is anticipated to increase 3.2 percent in 2014, 3.8 percent in 2015, and 3.2 percent in 2016. High-tech industrial production (computers and electronic products) is projected to expand by 4.7 percent in 2014, 8.5 percent in 2015, and 10.4 percent in 2016.

During the report period (May through July 2014 for most), 20 of the 27 industries MAPI monitors had inflation-adjusted new orders or production at or above the level of one year prior (the same as reported last quarter), while five declined and two were flat.

Meckstroth reported that 11 industries are in the accelerating growth (recovery) phase of the business cycle, 10 are in the decelerating growth (expansion) phase, three are in the accelerating decline (either early recession or mid-recession) phase, and three are in the decelerating decline (late recession or very mild recession) phase.