In this “Squawk Box” excerpt, Warren Buffett tells Becky Quick there’s “no question” the global economy is slowing down, but the U.S. is “inching along” as the U.S. residential housing market starts to improve.
but i think that there’s no question that worldwide there is some slowing downgoing on. and in the united states, actually residential housing is picking up and we’ve been waiting for that for a long time. and it hasn’t gotten to any big level yet. but our carpet businesses and brick businesses and all of that will come on with residential construction. and that has turned. and the general economy, i think it’s better than the u.s., certainly better in the u.s. than it is in europe. and in terms of the rate of decline in asia, it’s reasonably and we’re still inching ahead, but it’s inching. when did you first start to notice this global decline? this global slowdown? well, we’ve had a couple of companies that really are kind of realtime as to what’s going on. the number one, they sell these little tiny punching tools or cutting tools and they fit in these huge machine tools, cost millions of dollars. anybody turning out anything big are buying these little razor blade type items from us. and they don’t need a big inventory, we can deliver very quickly. their purchases reflect usage. and our strongest market is in the united states. but europe and asia have fallen off some. ane’re gaining market share. so there’s a decided decline in activity in all that manufacturing where you’re stamping metal and doing this sort of thing. we heard from caterpillar the other day and he says that he looks around the globe and he doesn’t expect to see a recession anywhere in 2013. but europe is the biggest problem spot. would you agree with that assessment? well, it is at present. its rated decline — it’s off a lower base. its rate of decline is not greater in my view than the rate of decline in asia. it’s just asia was doing better. the united states, actually, as they got the steadiest trajectory. and i don’t see any change in that, i mean. we’ve got the freight car — we’ve got a big energy pick-up in the united states, we’re getting a housing pick-up. those are big industries. let’s talk about some of those numbers, housing is a huge key. you told us before we’re not going to see a turn in the unemployment picture until we see a turn in the housing. he said you’re not going to see a turn in the unemployment picture until you see the turn in housing. he kind of set the thing on his head and said it’s the other way around, which comes first. well, demand comes first. you hire people when you start seeing demand. and you are seeing more demand. you’re seeing greater — i was with a guy last night at the ge dinner that is in the business of selling lots. we have the largest housing manufacturing company in the counat clayton homes, manufactured homes, but those — that business is up in the area of 10 to 15%. in terms of volume? in terms of units. in terms of units. real estate brokerage, we not only see a 15% increase in transactions, but we also see a small increase in the median price. this comes from all over the country. you name it. so that’s changed. you know, we’re going to make a lot more money on carpet this year than we made last year. and we hire people when that happens. so the united states economy is not tanking. asia from a higher level, wouldn’t necessarily call it tanking, but it’s heading down and europe has been having its troubles for some time. does that catch up with us? does that affect us at some point too? well, what we really hope is we affect them over time. and, no, i don’t necessarily think so unless there gets to be chaos some place. we’ve already adapted to what’s going on around the world.