If the Skyscraper Index maintains its track record, then China should steel itself for economic collapse. The infamous property index says construction booms that give rise to the world’s tallest buildings are the harbingers of economic busts.
On July 20, developers celebrated the groundbreaking of Sky City in the southern Chinese city of Changsha. It is set to be completed in 2014 and at 838 meters it would overshadow the Burj Khalifa in Dubai — currently the world’s tallest building — by 10 meters.
“The Skyscraper Index has a good 150-year correlation between the world’s tallest buildings and economic slowdowns and recessions,” says Andrew Lawrence, pioneer of the Skyscraper Index and head of Hong Kong and China property research at CIMB Group. “For China, there is no reason that correlation will change.”
According to the Skyscraper Index, the opening of every single “world’s tallest” building in the past century has coincided with an economic downturn in that country.
In the United States, builders installed the spire on New York’s Chrysler Building on October 23,1929 making it the tallest building in the world at 319 meters. Five days later, the Wall Street Crash wiped nearly 13% off the stock market and precipitated the country’s Great Depression.
In March 1996, Malaysia’s Petronas Towers were completed making it the world’s tallest building at 452 meters. Just sixteen months later, the Asian financial crisis hit the country and region. Malaysia’s stock market lost half of its value by the end of 1997.
Read: Could world’s tallest building bring China to its knees? – Source: CNN