EAST CHICAGO | The manufacturing sector helped lead the nation's economic recovery in the last few years, but now it may be up to the housing market and consumers to do the heavy lifting, ArcelorMittal USA CEO Mike Rippey said Thursday.
In his speech to a Lakeshore Chamber of Commerce audience, Rippey said he remains optimistic about the "fundamentals" of the U.S. economy despite risks such as the fiscal cliff, geopolitical tensions and the economic downturns in European countries.
Automobile manufacturers, heavy equipment makers and energy companies have helped the domestic steel producers raise capacity utilization levels from about 51 percent in 2009 to about 76 percent so far this year, according to data from ArcelorMittal and the American Iron and Steel Institute.
Since the recession, an "unacceptably high" unemployment rate and people continuing to worry about their job security have kept them from wielding their full economic might, Rippey said.
"If we're going to make our forecast, we're going to need to see the consumer be a bit more present," Rippey told more than 150 people at Ameristar Casino Hotel East Chicago.
That forecast is slow growth in the industry in the coming years.
Record-low interest rates and deflated housing values make the current market more affordable than ever, Rippey said. Also, the age of the U.S. vehicle fleet combined with estimates the nation's population will rise by 31 million in 10 years creates a strong opportunity to see consumer spending boom.
In January, the research firm Polk said the average age of light duty cars and trucks on the road is 10.8 years, which is a record high. Rippey said he expects U.S. auto sales to reach a 17 million-unit level before 2020. New car and truck sales could reach or exceed 14 million units this year, up from 12.7 million units in 2011 and nearly 11.6 million units in 2010, according to the National Automobile Dealers Association.
Rippey said although he's confident leaders in Washington won't let the nation's economy sustain the scheduled federal spending cuts and tax hikes, the political bickering on the matter is sad.