Continuing a trend starting in 1983, the Nelson-Farrar refinery construction index rose quickly to 2,144.4 in December 2007 from 1,961.6 in January 2006. The labor component of the index increased, as did the material component, at a rapid rate. The labor index rose to 2,661.3 from 2,469.3 during the 2-year period, while the materials index increased to 1,369.1 from 1,200.3.
The miscellaneous equipment index varied more than 100 points in the 2-year comparison. The category includes pumps and compressors, electrical equipment, heat exchangers, instrument, and engines. They are therefore manufactured items, and their costs are a measure of manufacturing efficiency. The Nelson-Farrar refinery operations index increased 40 points during 2007. The process unit index dropped during 2006 and then gained during 2007, starting at 890.2 and ending at 924.6.
These two indexes varied during 2006 and then rose continuously during 2007. Changes in the cost of refinery fuels accounted for much of the oscillation. Continuing increases in refinery operating efficiency helped stabilize values of both indexes.
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