HOW INDEXES HAVE RISEN

Jan. 1, 1990
Continuing a trend starting in 1983, the Nelson-Farrar refinery construction index rose slowly, from 1106.2 in January 1987, to 1184.1 in December 1988. Labor component rose at about the same rate as did the material component. The labor index rose from 1352.8 to 1427.5 over the 2-year period, while the material index rose from 736.3 to 819.0 over the same period.
Gerald L. Farrar
Contributing Editor

Continuing a trend starting in 1983, the Nelson-Farrar refinery construction index rose slowly, from 1106.2 in January 1987, to 1184.1 in December 1988. Labor component rose at about the same rate as did the material component. The labor index rose from 1352.8 to 1427.5 over the 2-year period, while the material index rose from 736.3 to 819.0 over the same period.

The miscellaneous equipment index rose 63.1 points, from 693.7 to 756.8 over the 2-year span. This category includes pumps and compressors, electrical equipment, heat exchangers, instruments, and engines. These are manufactured items, and their costs reflect increased manufacturing efficiency.

The Nelson-Farrar refinery operations index remained fairly constant in the 19871988 period. In January 1987, the index stood at 363.4.

In December 1988, index value was 379.3. The process units index showed a small drop during the 2-year period, starting at 412.9 in January 1987, and ending at 403.4 in December of 1988. These two indexes varied somewhat randomly, showing month-to-month cost variations as they occurred, without any masking effect.

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