(MONEY Magazine) – The guessing game continues about when the economy will begin to recover, with many predicting a rebound by this summer. Perhaps one of the best ways of measuring economic strength is to examine industries fundamental to consumers and to the economy. No industries play a more integral role than housing, energy and autos. I've always believed that when we're all buying cars and houses and the energy each requires, we're doing pretty well. This month, I heard from top executives in all three sectors: Richard Wagoner of General Motors, the nation's No. 1 automaker; Mark O'Brien of Pulte Homes, America's top home builder; and Keith Bailey of Williams Cos., a big diversified energy firm.

RICHARD WAGONER President and CEO, General Motors

Dobbs: What's your sales outlook for 2002?

Wagoner: The auto market has shown surprising resilience this year, with auto sales exceeding most everyone's expectations. For the consumer, there's never been a better time to purchase a vehicle: Vehicle affordability is the best it has been in many years, quality is at an all-time high, and the features and functionality of our vehicles are better than ever. It looks like 2001 will be the second- or third-best year ever for vehicle sales in the U.S., at about 17.4 million sold. Next year, we expect the industry's sales to moderate; we're forecasting 15 million to 15.5 million vehicle sales.

Dobbs: What impact will zero-percent financing have on profit margins? Are you borrowing from 2002 and 2003 sales?

Wagoner: GM's Keep America Rolling incentives--the zero-percent financing--has done a terrific job of keeping the consumer in the economy after the Sept. 11 tragedy. There was a huge drop-off in auto sales immediately following the attacks and the potential over the longer term for consumers to retrench. Our actions helped turn things around.

We know the auto industry is an important fiber in the nation's economic fabric, accounting for about 6.5% of manufacturing GDP and about 7 million jobs. It really was important to bring consumers back into the market, and our program did that. Our program did not create a lot of additional marketing costs because we took our planned marketing budget and focused it on this program. Additionally, the favorable interest-rate environment minimized the cost impact. Finally, it is important to note that GM won over many customers who were in competitors' vehicles prior to this program, which is always a big plus for us. While the effect on profit margins is nominal, the positive effect on market share has been extremely valuable. Having said that, we have a lot of work to do to improve our profit margins going forward. We're not happy with margins today, and we're working hard to improve them.

Dobbs: What is your read on the economy? When do you see recovery?

Wagoner: We are cautiously optimistic that the economy will begin to recover as early as the first half of 2002 and gradually improve through the balance of the year.

Dobbs: Has the Fed cut enough? Are there measures Washington could take to help your industry or to help boost consumer confidence overall?

Wagoner: Although interest rates are pretty low already, we think the Fed is prepared to make further cuts. Given the weakness of the economy, a fiscal-stimulus package is necessary. The stimulus needs to be large enough to have an impact and also be broad-based. We support a temporary payroll-tax deduction--to get money into consumers' hands right away--and the repeal of the alternative minimum tax.

MARK O'BRIEN President and chief operating officer, Pulte Homes

Dobbs: What's the state of the homebuilding industry?

O'Brien: It's best to put it in the context of our November results. For Pulte Homes and the home-building industry, November was actually up over the same period last year. Right after Sept. 11, we saw a drop of about 15% to 20% in home sales. In October, we saw a positive trend. That's carried through for November. We have to believe the Federal Reserve's lowering rates has provided a level of comfort for home buyers. So, if traffic [prospects visiting sales centers] is a proxy for underlying demand, we feel better about where we are today than we would have expected to feel on Sept. 12.

Dobbs: Do you expect the recent strength to continue?

O'Brien: We're more optimistic than we are pessimistic. Absent some macro-economic calamity or world calamity, we think consumers have gotten themselves into a rhythm that we view as satisfactory for the home-building business.

Dobbs: Now rates are beginning to creep up again. What effect will that have if the trend continues?

O'Brien: If that trend were to continue indefinitely, it would obviously be bad. As we look at our business today, we're in a range of mortgage rates that seems to be agreeable to home buyers, particularly given that short-term rates have behaved more favorably than long-term. In addition, Fannie Mae and Freddie Mac and other companies in the mortgage industry have developed products that are indexed off of some of the shorter-term rates, so consumers have quite a variety of products to select from. As long as rates stay in the band that we've seen them in the last 24 months or so, I believe our business will continue to do well.

KEITH BAILEY Chairman and CEO, Williams Cos.

Dobbs: How's the energy industry doing?

Bailey: Certainly, Sept. 11 created an acceleration in the weakening of an already weak economy. That has resulted in some demand destruction for energy that, in turn, is manifesting itself in lower prices, high inventory levels and a slowdown in a lot of the various sectors.

On the natural gas side, we're in a period of the year when demand typically peaks, and the weather in many of the major markets has simply not been cold enough to drive much demand.

Dobbs: What effect has the Enron bankruptcy had on your industry and on your company?

Bailey: The events surrounding Enron have created some challenges in the capital markets. They have cast a cloud over those companies that participate in the same businesses as Enron, even though Enron has cast itself--and appropriately so--as being very different in its strategy and approach from the rest of that sector.

For a company like ours, in the long run, it is something that should benefit us. But it will clearly create turmoil that will linger for some time. As Enron's troubles reached a peak, we have seen a substantial increase in the number of people calling us and wanting to do business. What we, and others like us, need to do is to discipline ourselves to ensure that the business we do take on is consistent with our skill set and our philosophy prior to all this happening, and that we not get caught up in trying to be the next Enron, or to take that role in the form they've taken it. Because the one thing that the market has done pretty clearly is say that the kind of "asset light" strategy and structure like Enron had does not have long-term viability.

Dobbs: When do you expect to see a recovery begin to take hold?

Bailey: I think we'll see a fairly significant recovery sometime in the first half of this year. That's assuming the events in the Middle East and Afghanistan don't balloon into a much bigger war or disruption.

One of the outgrowths of the information age has been that everyone tends to reach the same conclusion at the same time, and they tend to share fairly perfect information in the short term, so people react more quickly. As a result, inventories are drawn down, oil rigs are laid down, the whole economy moves very sharply. I see the peaks and valleys, or the turning points in the economy, looking more V-shaped than U-shaped. And when you look at the stimulus that the government is pouring in--low interest rates, low energy prices--and the fact that people have largely ignored the half of the economy that will actually benefit from the events of Sept. 11, I think we'll see a recovery in the first half of 2002. By the end of this year, we'll be looking back on 2002 as a very good year for the economy--a rebound year.

Lou Dobbs is the anchor and managing editor of CNN's Lou Dobbs Moneyline.