General Electric has started to see the first “glimmers of hope” in the world economy, according to a senior executive at the US conglomerate.
Nani Beccalli, who as chief executive of GE International is in charge of all its business outside the US, said he saw several encouraging bits of economic data from round the world.
These included “signs of life” in the US and European retail sectors and improving profits among European banks as foreign competitors leave the market.
Mr Beccalli said: “The first glimmers of hope are there. This is the inversion of trends, which for a long period have been going down. The glimmers weren’t there two months ago”.
His comments are among the first from a bellwether company about signs of stabilisation in the economy.
They are given added weight by GE’s status as the world’s largest industrial group. GE’s international business has grown in importance and now brings in more than half of its revenues from operations in Asia, Europe, the Middle East and the Americas.
Mr Beccalli gleaned much of the information from the two-day ringround he conducts each month with the GE official in charge of each country in which the US company operates.
He pointed to positive data, including the recent rise in the Baltic dry shipping index, which acts as a proxy for global trade, and to increasing housing sales in the US in February.
But he added: “This is not the light at the end of the tunnel but rather some little sparkles.”
Mr Beccalli also cautioned that the events should not be read in connection with GE.
The US group has had a difficult past few months after it was stripped of its prized triple A credit rating and investors questioned its strategy for GE Capital, its financial arm.
It also cut its quarterly dividend for the first time since 1938.
But GE International has continued to benefit from the continued growth in countries such as China and India and on infrastructure spending in general round the world.
Mr Becalli’s comments on the first signs of hope were shared by other business participants at a European House-Ambrosetti conference – sponsored by the Financial Times – that took place last week in Brussels on the continent’s competitiveness.
Bernd Geilen, the head of retail bank ING Direct in Italy, said there were signs of stabilisation returning to the banking market, while Stefano Pambianchi of Cisco said technology companies were also seeing some rebound in orders.
