Asked again by host Larry Kudlow why companies were not investing, Faraci once more pointed to demand that has not materialized.
“Productivity has obviously been very good, so we’re creating more capacity with less resources. But at the end of the day, this is really about responding to demand, whether it’s automobiles or packaging products we make for a whole variety of industries and end users,” he said.
“We’re investing in India. We’re investing in Russia. We’re investing in Brazil. Not to ship products back here but because demand exists in those markets,” he said. “At the end of the day, this is really about responding to demand. We’re not going to go out and invest unless there’s demand.”
Earlier in the day, International Paper posted a better-than-expected quarterly profit on strong sales of shipping boxes and paper.
“I feel very good about the rest of the year,"Faraci told Reuters. "It’s not a macro-bullish story. It’s a macro-positive story.”
Don Peebles, CEO of Peebles Corp., a real estate developer, said that housing remains a drag on the economy.
A strong market, cheap money and high leverage fueled growth before the financial crisis, he said.
“What’s happening now is the housing market is not able to carry the economy,” he said. “Americans’ wealth has been decimated as a result of the lost value in their homes.”
Peebles also acknowledged, as the only small-business owner, that rising health-care costs and uncertainty over taxes were a challenge. But, he added, the No. 1 issue was access to capital.