Continuing a trend starting in 1983, the Nelson-Farrar refinery construction index rose slowly from 1,466.8 in January 1998, to l,520.1 in December 1999. The labor component of the index rose at a more rapid rate than did the material component.
The labor index rose from 1,822.9 to l,936.9 over the 2-year period, while the materials index declined 37.9 points, from 932.6 to 894.7.
The miscellaneous equipment index varied 28 points in the 2-year comparison. The category includes pumps and compressors, electrical equipment, heat exchangers, instrument, and engines. They are thus manufactured items and their costs are a measure of manufacturing efficiency.
The Nelson-Farrar refinery operations index increased 13.4 points from 413.3 to 426.7 in the 1998-1999 period. The process unit index also showed an overall increase during this period, increasing from 438.2 to 489.1.
These two indexes varied somewhat randomly, showing month-to-month cost variations without any masking effect. Changes in the cost of refinery fuel accounted for much of the oscillation. Continuing increases in refinery operating efficiency helped stabilize values of both indexes.
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