Economic Growth Hobbled by High Prices

The National Industrial Index presented a mixed picture of the nation's economic engine. Los Angeles is in the top spot due to the country's lowest vacancy rate, at 2%, and increased traffic at the ports of Los Angeles and Long Beach.

Unemployment has been on the rise but that is expected to turn around in the second half of this year. The rate of unemployment is expected to hit the mid-five% range by year's end.

One bright spot is exports due to the weak dollar which has boosted demand for U.S. goods and services. Net exports helped raise the annual GDP growth last year for the first time since 1991.

However, the unstable housing market, the decline in the credit markets and skyrocketing oil prices threaten to cancel any other areas of overall economic growth.

The real estate market is also shaky. Residential mortgage delinquency rates are still rising but commercial properties are holding their own. The rapid erosion of the credit market is undermining any other gains in real estate.  In Orange County, the industrial availability rate is around 6% and the office availability rate is around 16%.

The health and prosperity of the local and national economy hinges on the volitility of oil prices, credit defaults, and continued erosion in the value of commercial and residential real estate.