skyscraper have been symbol of economic plenteousness since Daniel Burnham , the architect behind some of the former tall building , say “ Make no little plans ; they have no magic to stir men ’s line of descent . ” But is it possible that improbable buildings also precipitate crashes ? According to one analyst , yes — and China , in exceptional , is head for a bust .
The concept is phone theSkyscraper Index , and it was name in a 1999 paper by economist Andrew Lawrence , who showed how the grammatical construction of record book - breaking skyscrapers has long correlated to economic busts . It ’s a pretty childlike idea , really : As interest rates go down , construction of office space increases to adapt expand companies . It let less expensive to build , so developers advertise higher and higher . Finally , as the manna from heaven peaks , a concentrated market and anxiousness over a bubble bring the whole thing grinding to a check .
Graphic byBloomberg Businessweek .
And , as Lawrence try out , the Index seems to hold up under examination — it lead all the way back to the early 1900s , when the Panic of 1907 coincided with the building of two record - breaking towers . The pattern remain , with the Empire State Building complete just before the clangoring of 1929 , which air the country spin out into the Depression . Same with the original World Trade Center , completed just before the 1974 Stock Market Crash , and the Burj Khalifa , and 12 of other supertalls . A 2011 meta - psychoanalysis call into dubiousness the idea that there ’s a real correlativity , but confirmed that building height and economical growth are related .
The brainiac behind the Index , Lawrence , was in the news show again this calendar week after arguing that China is on the scepter of an economic slowdown . grant to him , supertall mental synthesis task likeSky City , a planned tower in Hunan responsibility which will become the world ’s grandiloquent edifice if completed , foretell a bust . Speaking to CNN , Lawrence ( who now heads up Hong Kong and China holding inquiry at CIMB Group ) had this to say :
China will be building over 40 percent of the world ’s skyscrapers over the next four years so distinctly there ’s a construction bubble … The Skyscraper Index has a good 150 - class correlation coefficient between the world ’s tallest buildings and economic slowdowns and recessions . For China , there is no reason that correlation will change .
China has had a slow month — but so far , there ’s no real reading that they ’re manoeuver for a spill . We ’ll have to wait and see whether , as Lawrence predicts , their gross domestic product will come down as Sky City climb . [ CNN ]
Image viaRitholtz .
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