New Saudi Skyscraper = Doom For Global Economy?
Apr 24, 2014 18:01:23 GMT -5
Post by schwartzie on Apr 24, 2014 18:01:23 GMT -5
Why A New Skyscraper In Saudi Arabia Could Mean Doom For The Global Economy
Mamta Badkar
Apr. 23, 2014, 12:00 PM 118,595 25
kingdom tower, saudi arabia
Smith Gill
Saudi Arabia is expected to begin work on the Kingdom Tower next week.
The building in Jeddah is expected to cost $1.23 billion and stand 3,280 feet tall, according to the Saudi Gazette.
That's 568 feet taller than Dubai’s Burj Khalifa.
Construction is also underway on Sky City in China, projected to be 2,749 feet tall. Sky City is expected to finish before the Kingdom Tower and will, for a very brief period, hold the title of the world's tallest building.
Two years ago, Barclays introduced its Skyscraper Index, which suggests that construction booms, highlighted by record-breaking skyscrapers, coincide with the beginning of economic downturns.
In his 2012 report, Barclays' Andrew Lawrence and his team wrote that this is because "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."
But it isn't just the world's tallest building we should be looking at. Lawrence said it's also important to look at the number of skyscrapers being built and their geographic profile. This is because the tallest buildings "rarely stand alone."
With this in mind, investors should watch the building booms in China, India, and Saudi Arabia.
Here's a look at the Skyscraper Index from Barclays (click the image to enlarge it). Basically, what you see is a series of famous skyscrapers associated with subsequent busts. The most recent one is Dubai's Burg Khalifa. Another notable recent one is Malaysia's Petronas Towers, which presaged the Asian economic crisis of the late '90s.
skyscraper index
Drawing on Barclays' Skyscraper Index, we pulled 10 skyscrapers whose constructions coincided with the financial crises of their times.
Click at link to see the skyscrapers:
link
Mamta Badkar
Apr. 23, 2014, 12:00 PM 118,595 25
kingdom tower, saudi arabia
Smith Gill
Saudi Arabia is expected to begin work on the Kingdom Tower next week.
The building in Jeddah is expected to cost $1.23 billion and stand 3,280 feet tall, according to the Saudi Gazette.
That's 568 feet taller than Dubai’s Burj Khalifa.
Construction is also underway on Sky City in China, projected to be 2,749 feet tall. Sky City is expected to finish before the Kingdom Tower and will, for a very brief period, hold the title of the world's tallest building.
Two years ago, Barclays introduced its Skyscraper Index, which suggests that construction booms, highlighted by record-breaking skyscrapers, coincide with the beginning of economic downturns.
In his 2012 report, Barclays' Andrew Lawrence and his team wrote that this is because "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."
But it isn't just the world's tallest building we should be looking at. Lawrence said it's also important to look at the number of skyscrapers being built and their geographic profile. This is because the tallest buildings "rarely stand alone."
With this in mind, investors should watch the building booms in China, India, and Saudi Arabia.
Here's a look at the Skyscraper Index from Barclays (click the image to enlarge it). Basically, what you see is a series of famous skyscrapers associated with subsequent busts. The most recent one is Dubai's Burg Khalifa. Another notable recent one is Malaysia's Petronas Towers, which presaged the Asian economic crisis of the late '90s.
skyscraper index
Drawing on Barclays' Skyscraper Index, we pulled 10 skyscrapers whose constructions coincided with the financial crises of their times.
Click at link to see the skyscrapers:
link
