It’s not just bankers’ ballooning bonuses that can forewarn of an impending financial disaster. It now appears that periodic global cravings for ever-taller buildings might also be harbingers of economic doom. If new research from Hong Kong is to be believed, China’s frenetic high-rise boom, with India in its wake, could reflect a “misallocation of capital, which may result in an economic correction for two of Asia’s largest economies in the next five years.”
Since launching its Skyscraper Index 13 years ago, Barclays Capital (BarCap) has revealed “an unhealthy correlation between construction of the next world’s tallest building and an impending financial crisis,” claims the new report by Andrew Lawrence, the Hong Kong-based director of BarCap's property research. Lawrence reached back to New York City’s eight-floor Equitable Life building in the 1870s to trace connections between skyscraper investments and economic recessions.