What does the world's tallest building mean for Dubai?

Last week saw two major announcements about intentions to build the world's tallest building. First, Emaar Properties of Dubai weighed in with its plans. Then New York announced the winning scheme for the World Trade Center site.

Later it emerged that the $1.8 billion Dubai Tower, or Burj Dubai, is likely to be a carbon copy of a 560m-high tower rejected by the Melbourne planning authorities in 1999, and to be built by Australian firm Grocon on a site near to the Dusit hotel on the Sheikh Zayed Road.

The New York project is a 541m-high spire created by Berlin based architect Daniel Libeskind for the Ground Zero site. Both the New York and Dubai buildings comfortably surpass the existing holder of the world's tallest building title, the 452m-high Petronas Towers in Kuala Lumpur, though they may face competition from Shanghai's International Financial Centre which is presently under construction.

To some extent it is all a question of timing as to which city can claim the title of tallest building. And, of course, just a matter of time until another city builds a taller building.

But it is interesting to note that the completion of tall buildings almost always marks the top of the business cycle, and no city in any period has managed to avoid business cycles.

For example, the Empire State Building was completed in New York in 1929 just in time for the Wall Street Crash, and remained half-empty for a decade. Indeed, it was known as the Empty State Building for much of the 1930s.

Similarly, London's Post Office Tower 1966 (UK devaluation crisis); London's NatWest Tower 1974 (worst post-war stock market crash); World Trade Centre in New York 1974 (same stock market crash); Canada Tower in Canary Wharf 1990 (worst post-war UK recession); and even the Petronas Towers (1998 Asian crisis).

The message is simple. Tall buildings are conceived in booms, take some time to build and are completed just as the market tops out. Perhaps Ground Zero in New York and its re-building plans are a special case of building high in an economic downturn.

But in the case of Dubai and Shanghai the announcement of plans to build the world's tallest building can be seen as a warning sign that a boom is happening that will not last forever. However, the good news is that tall buildings take many years to complete and that the upward section of the business cycle is still to come.

Perhaps the local business communities should lobby for a complicated and slow building design to prolong the upswing for as long as possible. All the same, the more serious message is that construction of the world's tallest building is not only a symbol of business virility but also of mortality. Booms always go bust.