Skyscraper indicator and its application in the UK

Abstract

Objective: The research examines Skyscraper Indicator and its application in the UK. Until more recently, it was thought that this indicator was not suitable in gaging trajectory of Britain’s economy. The current study is therefore set to investigate whether Skyscraper Indicator can be used as a potential leading indicator for the UK.

Research Design & Methods: Research employs dummy variable regression to test the hypothesis. The study selects quarterly UK GDP and GDP per capita series over Q1 1960 - Q4 2014 period as macro variables and a series of dummies for construction starts,
durations and completions of the record-breaking buildings in the UK.

Findings: Despite some of the methodological limitations, estimates suggest that theannouncement of the construction of tallest building in the UK is related to national GDP.

Implications & Recommendations: To make robust economic forecasts, analysts may therefore use the announcement of the construction of the record breaking skyscraper as a possible bell-weather in gaging future direction of the UK economy. They may turn their gaze towards the London skyline when contemplating UK market movements.

Contribution & Value Added: The paper adds additional evidence on the contested Skyscraper Indicator issue.

Keywords

Crisis, Economy, Indicator, Skyscraper, UK.

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