Cycles analyst Edward Dewey (1895–1978), who served as the chief economics analyst for the US Department of Commerce, developed the "Skyscraper Indicator" in the 1940s. This indicator correlates human optimism with the number of high-rise buildings under construction. When people are extremely optimistic, they tend to express these feelings in massive construction projects, especially very tall buildings, driven by a perceived need to build toward the sky. Since this extreme optimism is typically reached at major market peaks in the economy, severe economic downturns usually follow, which involve more than just declines in real estate prices.
The world’s current tallest building, the Burj Khalifa in Dubai (828 m), nicely illustrates this process. It was built as a monument to the Gulf emirate’s boom in the middle years of the last decade and opened in late 2009, precisely as the emirate plunged into a financial crisis. These are the highest buildings in 2013:
The world’s current tallest building, the Burj Khalifa in Dubai (828 m), nicely illustrates this process. It was built as a monument to the Gulf emirate’s boom in the middle years of the last decade and opened in late 2009, precisely as the emirate plunged into a financial crisis. These are the highest buildings in 2013:
And these are the tallest buildings currently under construction and expected to be complete before 2020:
Skyscrapers under Construction.
It does not take a prophet to identify where the next economic bubbles are likely to burst. Of all the world's skyscrapers currently under construction, China accounts for 53% of them, and by 2016, China's highest buildings are projected to exceed the 'One World Trade Center' (417 m) in New York by 200 meters. The boom is evident, though the mid-2013 construction of the planned 838-meter 'Sky City' in south-central China was halted due to lack of a building permit. A similar enthusiasm for high-rises has gripped South Korea and India; India recently finished two skyscrapers and has 14 currently under construction. Furthermore, having miraculously survived the Arab Spring, the Saudi Arabian royal leadership is now decorating Jeddah with the 1,007-meter 'Kingdom Tower'.
Historical data supports this correlation: The construction of the Taipei 101 (508 m) began in 1999 and was completed in 2004. This duration spanned the recession of the early 2000s and the bursting of the tech bubble. Similarly, the completion of the Burj Khalifa in 2010 coincided with the height of the global financial crisis. Earlier, the Asian economic crisis, currency devaluation, and intense stock and property speculation in 1997–1998 coincided with the completion of the Petronas Towers (452 m), which were the world's tallest buildings at the time. According to the theory, the Great 18-Year Real Estate Cycle is once again due to peak and burst around 2016.
Historical data supports this correlation: The construction of the Taipei 101 (508 m) began in 1999 and was completed in 2004. This duration spanned the recession of the early 2000s and the bursting of the tech bubble. Similarly, the completion of the Burj Khalifa in 2010 coincided with the height of the global financial crisis. Earlier, the Asian economic crisis, currency devaluation, and intense stock and property speculation in 1997–1998 coincided with the completion of the Petronas Towers (452 m), which were the world's tallest buildings at the time. According to the theory, the Great 18-Year Real Estate Cycle is once again due to peak and burst around 2016.
World's Tallest Buildings 2020: Excuse me, while I kiss the sky ...