The economy, namely the uncertainty surrounding it, has been a hot topic recently at NAIOP Vancouver. Interviews with John McLernon, and the release of our Economic Outlook Survey results are just some of the things we have been talking about. In this month's Industry Leaders Blog, we dig deeper into the economic outlook, and get the information straight from the experts.

NAIOP Vancouver recently had the chance to sit down with Helmut Pastrick, Chief Economist for Central Credit Union 1, the central financial facility and trade association for the B.C. and Ontario credit union systems. We wanted to get the expert's opinion on the economy - where it is, where it's going, and what to look out for. And we got just that. In this week's installment, we discuss the current state of global economy, what's causing it and where it's going. Find part one of a four-part series below, and check back every Wednesday for the next installment of The Industry Leaders Blog.

For the year ahead, where is the economy going? Are we out of the weeds yet, so to speak?

The uncertainties for the coming year of course originate externally - Europe being the primary problem area. Although the US has its problems that could present some risk to the outlook for Metro Vancouver, the situation is evolving quite quickly in Europe. Whereas in the US the situation is mainly related to the debt/deficit problems, in Europe you're dealing with the potential for a severe banking crisis. This situation certainly has the potential for creating a fair amount of havoc in the financial markets and equity markets, as well as the currency and commodity markets. That accounts for much of the volatility we're seeing in those markets - the day to day movement can be quite considerable.

This whole situation could drag on for many more months, potentially into 2013. That just keeps the cloud over the markets - uncertainty and reduced business confidence, particularly for anyone dealing in or with Europe. That's certainly an economy that is going to underperform, and an economy that is probably in the early stages of a recession and likely to remain in a recession for the next 6-12 months.

That too presents some drag for the US and for the global economy really - Europe plays a fairly important role in imports and exports with the US and emerging markets. Canada's trade exposure to Europe is fairly small, somewhere around 10% or less, but for the US it's about 25%-30%. European banks also provide a fair amount of credit for companies in the emerging markets. A banking crisis or a credit crunch would have significant impacts on those economies - it's very much a fluid situation.

This is a point in time when policy makers have a significant impact on the outlook. Based on their recent performance, they will likely remain behind the curve and opt not to choose the solution that would turn the tide, but will stumble along and try to avoid the critical decisions - ultimately markets will force their hand. Policy makers will come up with a solution that requires substantial commitment and more money to be put up, particularly by the EU central bank. Of course, all that has to yet play out. I think we are still not even at the halfway point.

So you think we are still on the downslope?

I think so. When it comes to Europe, every meeting that they have they seem to understand the severity of the problem more, and they seem to be more committed to putting increased resources towards the problem. But when you're dealing with 17 countries and a number of institutions including the IMF, it's a slow process to reach agreement. You know if Europe was one company with one central government, decisions would be much easier; much more rapid and decisive. When we saw the financial crisis hit the US in late 2008, actions were taken very promptly. In the subsequent weeks we saw some decisive action by policy makers in the US - in Europe it's a much slower process.

What are your thoughts? Is it going to get worse before it gets better? Will Europe be able to dodge a recession? Share your thoughts in the comments below.

Tune in next Wednesday for the next installment from our interview with Helmut Pastrick, and get his perspective on the economic outlook for Canada, BC and Metro Vancouver.