Skyscraper Index

For the skyscraper named "The Index" in Dubai, see The Index (Dubai).

The Skyscraper Index is a concept put forward by Andrew Lawrence, a property analyst at Dresdner Kleinwort Wasserstein, in January 1999,[1][2] which showed that the world's tallest buildings have risen on the eve of economic downturns.[3] Business cycles and skyscraper construction correlate[4] in such a way that investment in skyscrapers peaks when cyclical growth is exhausted and the economy is ready for recession.[5] Mark Thornton's Skyscraper Index Model successfully predicted the Great Recession at the beginning of August 2007.[6][7]

The buildings may actually be completed after the onset of the recession or later, when another business cycle pulls the economy up, or even cancelled.[5] Unlike earlier instances of similar reasoning ("height is a barometer of boom"),[8] Lawrence used skyscraper projects as a predictor of economic crisis, not boom.

One statistical study found that the height of buildings is not an accurate predictor of recessions or other aspects of the business cycle, but that GDP can predict the height of building construction.[9]

  1. ^ Lawrence, Andrew (1999). "The Skyscraper Index: Faulty Towers". Property Report. Dresdner Kleinwort Waserstein Research, January 15, 1999. {{cite journal}}: Cite journal requires |journal= (help)
  2. ^ Berthelseh, John (2008). "The Return of the Skyscraper Index". Asia Sentinel, November 28, 2008. Retrieved 2009-01-01.
  3. ^ Leonard, Devin (September 5, 2005). "Curse of the Skyscraper". Fortune, September 5, 2005. Retrieved May 23, 2010.
  4. ^ Thornton, p. 51
  5. ^ a b Thornton, p. 53
  6. ^ Mark Thornton (August 7, 2007). "New Record Skyscraper (and depression?) in the making". Mises Institute.
  7. ^ Voigt, Kevin (January 8, 2010). "As skyscrapers rise, markets fall". CNN. Archived from the original on January 13, 2011. Retrieved January 8, 2010.
  8. ^ Willis, p. 167
  9. ^ Cite error: The named reference MizrachMundra was invoked but never defined (see the help page).