In November, California led the nation in total exports ($12.8 billion) using the Bureau of Economic Analysis’ (BEA) U.S. Principal Parties of Interest (USPPI) series. Texas had the second highest total export value for the month ($11.7 billion). Year-over-year, California’s total exports increased by +9.7% while Texas’ total exports increased by +5.9%. In the area of manufactured exports, Texas edged out California with $9.6 billion versus $9.0 billion (year-over-year increases of +5.0% and +9.7% respectively). Year-to-date (YTD), total California exports increased by +7.6% (to $117.7 billion) compared with the first eleven months of 2006.

The California Employment Development Department (EDD) released December unemployment estimates last week.  Seasonally adjusted, the Los Angeles County unemployment rate was 5.6%, up from 5.3% in November, from 5.1% in October, and from 4.5% a year earlier.  December was the seventh consecutive month that the County’s unemployment rate increased over the previous year.

Take note, several development projects for industrial condo’s in the greater Los Angeles area have found that in the past year demand for their product has waned. Their marketing strategies have intensified with the goal of selling the remaining units.

The Southern California industrial market continues to generate superlatives — highest rents, lowest vacancies, most construction, greatest absorption — but 2008 looks to a see if not an actual slowdown at least a tapering off in the rate of growth.

One forecaster states “It’s a time to catch our breath and prepare for the next wave. Most industrial developers are welcoming the slowing. The pace has been almost too fast. All this money has been pouring in, and sales and lease activity has been unbelievable. I think most people agree we need a break to catch our breath and assess what the next steps should be. Demand remains solid on both the sales and leasing ends. Cap rates are holding. Rents are holding. It’s more a question of slowing acceleration than deceleration.”

If there is any serious concern about the region’s future, it lies in the possibility of a downturn at the ports of Los Angeles and Long Beach, which account for 40% of U.S. imports.