U.S. manufacturing isn’t likely return to pre-recession levels for at least year and a half largely because the sector is grappling with weak demand for American exports and federal government cutbacks.

“The manufacturing sector has yet to fully recover from the recession and will likely not reach its previous peak level of production until very late in 2014,” said Don Norman, senior economist for the Manufacturers Alliance for Productivity and Innovation trade group.

Manufacturing output held nearly flat in May after falling the previous two months, the latest sign that the field is struggling. Output of consumer goods, including processed foods and paper products fell last month.

The largest decline came in defense and space equipment — a category that has failed to post a monthly gain this year, reflecting government budget tightening.

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