New government data shows the number of manufacturing jobs in the U.S. last year grew 1.2%, or 136,000, the first increase since 1997. And even better news is that total will grow again this year by about 2.5%, or 330,000 manufacturing jobs, according to economists at IHS Global Insight and Moody’s Analytics.

This won’t come close to making up for the nearly six million lost since 1997, but manufacturing should be at least a modest contributor to total U.S. employment in the next couple of years, these economists say.

“(Manufacturing is) the shining star of this recovery,” says Thomas Runiewicz, an economist at IHS. He expects total U.S. manufacturing jobs this year to rise to about 12 million.

Mark Zandi, chief economist at Moody’s Analytics, agrees stating “Manufacturing is going to be a significant source of job growth over the next decade.” Zandi says U.S. manufacturers today are now very competitive, with much lower labor costs and debt burdens, and now can afford to expand. He expects manufacturing job growth to average about 2% a year through 2015.

Hoping to further stimulate investment and job growth Congress approve a new tax break in December allowing companies to deduct from taxable income 100% of certain types of investments in 2011.

Despite the upbeat forecasts, some experts are predicting that job growth may remain modest because many companies are finding ways to increase production through greater efficiency and automation, without adding many workers. Conrad Winkler, a vice president at the consulting firm Booz & Co. who focuses on manufacturing, says manufacturers are being very cautious in their hiring, partly to avoid the risk of having to lay off people later on.

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For more information, please check out this article from the Wall Street Journal.