Economist Andrew Lawrence came up with the Skyscraper’s Index which shows the correlation between the construction of the world tallest buildings and economic cycles. His thesis is that in years in which the tallest building is complete or near completion, the economy downturns. To me it seems really odd and I can’t find any reason behind this correlation or coincidence; I guess this is what they call in regression analysis a Spurious Correlation, where observation are correlated completely by chance.
| Building Completed | Name of Building | Location | Hight | Stories | Economic Downturn |
| 1908 | Singer | New York | 612 ft. | 48 | Panic of 1907 |
| 1909 | Metropolitan | New York | 700 ft. | 50 | Panic of 1907 |
| 1912 | Woolworth | New York | 792 ft. | 57 | - |
| 1929 | 40 Wall Street | New York | 927 ft. | 71 | Great Depression |
| 1930 | Chrysler | New York | 1,046 ft. | 77 | Great Depression |
| 1931 | Empire State | New York | 1,250 ft. | 102 | Great Depression |
| 1972/3 | World Trade Center | New York | 1,368 ft. | 110 | 1070s stagflation |
| 1974 | Sears Tower | Chicago | 1,450 ft. | 110 | 1070s stagflation |
| 1997 | Petronas | Kuala Lumpur | 1,483 ft. | 88 | East Asian |
| 2009 | Burj Dubai | Dubai | 2,684 ft. | 167 | Global Financial Crises |
| 2012* | Shanghai | Shanghai | 1,509 ft. | 94 | China? |
* I’m not sure whether Burj Dubai will actually be completed or not, so who knows maybe Shanghai building will be the tallest building by 2012.
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I really think there is a relationship. When an economy overextends and there is nothing else to do that build the tallest building; that surely tells u that they peaked and are ready to burst the bubble!
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yeah well the tallest building represents over confidence and growth in an economy and that usually is in the peak of the economic cycle. Notice the location and year the building is completed it was right after a high growth in that country and usually after such growth you have no where else to go other than down the cycle.
Again, to me tallest building represents over confidence; and over confidence represents peaks.
“We simply attempt to be fearful when others are greedy and to be greedy only when others are fearful.” Warren Buffet
But that doesn’t mean that if u build the tallest building the economy will crash
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What about Taipei 101?
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bible had tower of babel (likely built in iraq zone, if it was ever real), but i am puzzled that there is not some other correlation to largest ship of an era, large mines (or other holes in the ground), large dams, large bridges – in effect anything that requires large leverage to commence (and the lender must therefore be confident or a fool (and perhaps both!))
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NYSE building built in 1922, (timed with commodity boomlet) expanded in 1969 when stocks were ready to top for 12 years. (There was so much business in 68-69 the stock market was closed on Wednesday to clear up paperwork and roughly 80% of Harvard B. School grads went into Investment Banking. Chicago Board of trade building built in 1930. Good times and confidence are key pre-requisites for large scale buildings. Huge investments and the requisite credit expansion create inflationary commodity demand which ultimately sows the seeds of higher interest rates, tight money and market downturns.
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One of the key reasons for this correlation is the availability of credit. Tall building are incredibly expensive to build, and the taller they get the less financially efficant they are. Few companies can afford to build tall buildings during a recession. However, before a recession usually comes a period of easy credit, particularly so in 2007, but also before just about all major recession, for example Latin America, Asian recessions and the Great Depression. This means that companies that want to increase there status and appear to be big and important and want large impressive Head Offices will often do so when credit is easy. When the recession hits, the buildings are usually half complete and paid for, so their finish date is inside the recession. A classic example is the Shard in London.
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