Skyscrapers 'linked with impending financial crashes'

[Singidunum]

Skyscrapers 'linked with impending financial crashes'

There is an "unhealthy correlation" between the building of skyscrapers and subsequent financial crashes, according to Barclays Capital.

Examples include the Empire State building, built as the Great Depression was under way, and the current world's tallest, the Burj Khalifa, built just before Dubai almost went bust.

China is currently the biggest builder of skyscrapers, the bank said.

India also has 14 skyscrapers under construction.

"Often the world's tallest buildings are simply the edifice of a broader skyscraper building boom, reflecting a widespread misallocation of capital and an impending economic correction," Barclays Capital analysts said.

The bank noted that the world's first skyscraper, the Equitable Life building in New York, was completed in 1873 and coincided with a five-year recession. It was demolished in 1912.

Other examples include Chicago's Willis Tower (which was formerly known as the Sears Tower) in 1974, just as there was an oil shock and the US dollar's peg to gold was abandoned.

And Malaysia's Petronas Towers in 1997, which coincided with the Asian financial crisis.

The findings might be a concern for Londoners, who are currently seeing the construction of what will be Western Europe's tallest building, the Shard.

That will be 1,017ft (310m) tall on completion.