Page 191 - Plant design and economics for chemical engineers

COST ESTIMATION 165

labor rates and materials costs for industrial construction. It employs a compos-
ite cost for 2500 lb of structural steel, 1088 fbm of lumber, 2256 lb of concrete,
and 200 h of common labor. The index is usually reported on one of three
bases: an index value of 100 in 1913, 100 in 1949, or 100 in 1967.

Nelson-Farrar Refinery Construction Cost Index?
Construction costs in the petroleum industry are the basis of the Nelson-Farrar
construction index. The total index percentages are weighted as follows: skilled
labor, 30; common labor, 30; iron and steel, 20; building materials, 8; and
miscellaneous equipment, 12. An index value of 100 is used for the base year of
1946.

Chemical Engineering Plant Cost Index$
Construction costs for chemical plants form the basis of the Chemical Engineer-
ing plant cost index. The four major components of this index are weighted by
percentage in the following manner: equipment, machinery, and supports, 61;
erection and installation labor, 22; buildings, materials, and labor, 7; and
engineering and supervision, 10. The major component, equipment, is further
subdivided and weighted as follows: fabricated equipment, 37; process machin-
ery, 14; pipe, valves, and fittings, 20; process i and controls, 7; pumps
and compressors, 7; electrical equipment an materials, 5; and structural
supports, insulation, and paint, 10. All are based on
1957-1959 = 100.

Other Indexes and Analysis

There are numerous other indexes presented in the literature which can be used
for specialized purposes. For example, cost indexes for materials and labor for
various types of industries are published monthly by the U.S. Bureau of Labor
Statistics in the Monthly Labor Review. These indexes can be useful for special
kinds of estimates involving particular materials or unusual labor conditions.
Another example of a cost index which is useful for world-wide comparison of
cost charges with time is published periodically in Engineetirzg Costs and

tThe Nelson-Farrar refinery construction index is published the first week of each month in the Oil
and Gus Journal. For a complete description of this index, see Oil Gas J., 63(14):185 (1965);
7448168 (1976); and 83(52):145 (1985).
$The Chemical Engineering plant cost index is published each month in Chemical Engineering. A
complete description of this index is in Chem. Eng., 70(4):143 (Feb. 18, 1963) with recapping and
updating in issues of 73(9):184 (April 25, 1966); 76(10):134 (May 5, 1969); 79(25):168 (Nov. 13,1972);
82(9):117 (April 28, 1975); 85(11):189 (May 8, 1978); 89(8):153 (April 19, 1982); and 92(9):75 (April
29, 1985).