The recovery in the U.S. economy will be uneven and prolonged, with significant improvement in the housing industry not likely until 2011, Illinois Tool Works Inc. (ITW) Chief Executive David Speer said Thursday.

Speer said he doubts the U.S. industrial sector will rebound much during the second half of 2009, as some executives are anticipating. Instead, he sees the middle of 2010 as a more realistic time frame for a recovery.

The Illinois-based diversified manufacturer operates more than 875 businesses, with concentrations in building supplies, automotive components, welding equipment, packaging and commercial kitchen equipment. ITW reported first-quarter sales declines of more than 20% of in many of its business lines.

"I don't expect there to be any significant rebound in these markets this year," Speer said during comments at a Sanford C. Bernstein & Co. investor conference in New York that was Webcast. "I think the recovery will be more prolonged."

Speer predicted the recovery in the U.S. housing market won't take hold until 2011.

He said inventory destocking has mostly been completed in ITW's end markets, but added the pace of restocking will be slow and cautious.

"I don't expect to see any rapid restocking occurring," he said. "People want to avoid a false bottom. They're going to be reluctant to put much stock back into the system."

ITW has been averaging about $1 billion a year in new revenue from business acquisitions in recent years. But Speer said the acquisition market has grown cold because business owners are reluctant to sell when plunging sales and profits drive down valuations.

"Sellers are not wanting to sell at the bottom, and if they can, they're going to wait," he said.

ITW shares closed down 0.8% at $32.14 Thursday.

-By Bob Tita, Dow Jones Newswires; 312-750-4129; robert.tita@dowjones.com