Nelson-Farrar Quarterly Costimating: Changes in indexes for selected equipment items

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.