Manufacturing is growing at the fastest rate since 1994, with firms poised to create jobs as cuts are made in the public sector, according to a report.
The Engineering Employers Federation said a survey of 300 companies showed that most planned to invest in their business, with innovative ideas for growth.
The EEF said the study showed the potential of manufacturing to create jobs and "rebalance" the UK economy.
Chief executive Terry Scuoler said: "Manufacturing is well-placed to fill the growth gap as the public sector plays a smaller role in our economy and make the investments in innovation and skills that will drive our economy forward and create new jobs.
"But this will only happen if there is a genuine partnership with government that helps companies of all sizes and growth stages to overcome the barriers that they currently face.
"Whilst the current attention on young businesses and start-ups is helpful, we must not ignore the wider benefits to the economy that larger companies bring.
"The UK doesn't just need a handful of larger companies over the next decade, we need hundreds of them with the scale and muscle to tackle our economic challenges. Otherwise, we risk placing a speed limit on our growth potential."
Peter Russell, of the Royal Bank of Scotland, which helped with the research, added: "Manufacturing continues to make a significant contribution to the UK economy and is well-placed to play an even greater role in a sustained economic recovery."
A Department for Business spokesman said: "Manufacturing is a key part of the Government's plans to grow and rebalance the economy and we are committed to the long-term future of the industry.
"We will shortly be publishing a manufacturing framework, setting out a new and fresh approach that reflects manufacturing's importance for our economic recovery and the growth of the UK economy."
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