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Businesses aren’t investing in the United States because of a lack of consumer demand, International Paper CEO John Faraci said Friday.
“I think this was all about consumer spending and demand. You know, the problem we have is there’s inadequate demand to create jobs. We know how to respond when there is demand,” he said on CNBC’s “ The Kudlow Report .”
The U.S. Commerce Department estimated that gross domestic product expanded at a 2.2 percent annual rate in the first quarter, falling short of analysts’ expectations it would grow 2.5 percent and slowing down from the fourth quarter’s 3-percent rate.
Consumer spending has been damped partly because the nationwide housing market has yet to recover, he said.
“Until it does, we’re not going to see the kind of consumer spending you would expect coming out of a recovery,” he said.
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.
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