Raise your hand if you're confident about global growth.

Can Unilever Conjure the Sweet Smell of Success?

Mark Gilbert is a Bloomberg View columnist and writes editorials on economics, finance and politics. He was London bureau chief for Bloomberg News and is the author of “Complicit: How Greed and Collusion Made the Credit Crisis Unstoppable.”
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Unilever NV Chief Executive Officer Paul Polman is, among other things, the world's biggest deodorant salesman. He sells more than $60 billion of consumer goods each year, from Dove antiperspirants to Ben & Jerry's ice cream, so he should have a pretty good grasp of what's happening at the grass roots of the global economy.

First, the good news: "We are at the bottom of what we can expect." Now, the qualifier: "We could see the second half of this year slightly improve on the first half, but it will be a slow recovery." And finally the bad bits: Brazil's economy "has come to a grinding halt," while India's leaders have "no magic wand" for what ails their nation.

Polman said today on a conference call today that sales growth for Unilever, which sells its toothpaste-to-margarine "in all of the countries of the world," was just 2.5 percent in the second quarter, down from as much as 4 percent last year. "Subdued" growth is "here to stay for at least the next six to twelve months," he added.

Unilever's underlying sales, excluding currency shifts and acquisitions and so forth, increased by 3.8 percent in the three months to June 30, undershooting the 4.3 percent median estimate of 15 analysts. In emerging markets, sales growth slumped to 6.6 percent from 10 percent a year earlier. In developed markets, revenue growth was a paltry 0.3 percent.

The global economy seems to be at a particularly fragile juncture, especially against a backdrop of geopolitical risk. You wouldn't know that, though, from looking at global stock-market performance:

No wonder central bankers, particularly in the U.S., are worried about asset prices and the chase for returns by investors as they consider how to unwind some of pump-priming programs they put in place to goose growth. Let's hope they're paying attention to the implicit message in Unilever's deodorant sales.

This column does not necessarily reflect the opinion of Bloomberg View's editorial board or Bloomberg LP, its owners and investors.

To contact the author on this story:
Mark Gilbert at magilbert@bloomberg.net

To contact the editor on this story:
Marc Champion at mchampion7@bloomberg.net