Skyscraper Index

The skyscraper index is a theory that was set up in January 1999 by Andrew Lawrence, the scientific director of Dresdner Kleinwort Wasserstein. ( There is a minor modification of the already 1957 by C. Northcote Parkinson in "Parkinson 's Law" - Chapter 8, Plans and Plants - developed theory that the highest perfection of buildings is achieved if the institutions that reside in them are already on the decline. )

Published in 2010 Gunter Löffler a discussion paper on the correlation of stock prices and the construction of skyscrapers in which he came to similar conclusions.

Concept

The approach builds on the fact that the tallest buildings in the world were built ever before periods of economic decline. Economic cycles and the construction of skyscrapers correlate in a manner so that the largest investments are made in skyscrapers, when the peak of the business cycle has been reached or is imminent.

While skyscrapers and tall buildings always be regarded as an indication of the economic boom, Lawrence sees it as a sign for the downturn. He used skyscraper projects as indicators of the economic decline.

Formation

Lawrence began the development of the concept of the skyscraper index rather jokingly, as he has been inspired by a comedy show. He compared the historical data with investments in wholesale and record construction projects in the U.S. and discovered remarkable connections. The first interesting finding concerned the panic of 1907. Shortly before this, two major construction projects in New York City, namely the Singer Building and Metropolitan Life Tower, begun, which were completed in the years 1908 and 1909.

The next crisis, the Black Thursday in 1929 again went Rekordbauten ahead: the construction of 40 Wall Street, the Chrysler Building and the Empire State Building. During the 1973 oil crisis and the stock market crash of 1973/74 which, in turn, world's tallest building, the Sears Tower and the World Trade Center were opened. The last correlation that is called Lawrence, are the Petronas Towers and the Asian crisis in 1997.

In 2005, the theory was revived when five new, large building projects in Manhattan have been addressed, but none was the tallest building in the world.

Further evidence for this theory provides the construction boom in Dubai with the Burj Khalifa, its completion could be secured after the onset of the financial crisis from 2007 only by generous loans from the neighboring country.

Counterarguments

Critics consider the model of the skyscraper index as unreliable. For example, the recession of 1937 and the recession in the early 1980s went ahead no Rekordbauten.