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2002 Japanese Chemical Plant Cost Trend

(as Compared with USA and UK)
Yoshimi Saito

N

ow Japan passed through a long tunnel of deflation, and, as for the economic situation, light of a
destination looked finally. Total production

(GDP) was given to a prospect of 2.0% in the next fiscal
year (2004). Ahead of a result of Iraqi War and a Presidential Election of the next year, the American economic
situation is no good.
To estimate plant cost trends under these
circumstances is not a simple matter. However, analyzing
plant cost trends in such unfavorable conditions is at
the same time a meaningful and worthwhile task. In this
paper, I review the trends between 1993 and 2002 and
try to establish plant cost tendencies from 2002 forward.
This time, in order to define plant cost trends, especially
in Europe, I have considered the Cost Engineers’ Cost
Index used in some countries.
TYPE AND USE OF PLANT COST INDEXES
It is well known that one of the ways to determine plant
costs-equipment and material cost, construction labor
cost, and engineering cost trends-is to examine cost indexes. For many yeas in Europe and US, each type of
cost index has been used according to its purpose. Using details from the cost indexes from my book Introduction to Cost Engineering,
I concentrated on the use and purpose of each type
of cost index. Table 1 lists construction-related cost indexes used in some countries, arranged accodng to type
and purpose.
Besides being used to estimate cost trends, cost
indexes are mainly used to update cost data, in the escalation clause, and to estimate plant cost (Rapid Estimation).
Cost indexes are used to covert historical data to
present figures or calculate plant estimation costs. Problems arise, however, when estimating what extension

costs will increase in 1 or 2 years, taking into account
the present economic situation. In such cases, one alternative is to make estimates based on the tendencies
of cost index values in a period of approximately 10
years.
COST INDEX ELEMENTS AND WEIGHT
l

PERCENTAGES

In order to analyze plant cost tendencies, I selected
the following plant cost indexes used in US, Japan, and
the United Kingdom, respectively.
Japan
The JSIM (Japan Society of Industrial-Machinery
Manufactures) Chemical Plant Cost Index, like the
Chemical Engineering Plant Cost Index, is a compound
index. Regarding the JSIM Chemical Plant Cost Index
elements and composition, please refer to the 1995’s
indexes given in Table 3. The cost index is published
once a year by the JSIM.
Unite States
The Chemical Engineering Plant Construction
CostIndex is known as the CE Plant Cost Index. The
Table 1 The Type and Purpose of Various Cost
Indexes
Name of Cost Index
(A) U.S.A.
Engineering News Record
-Construction Cost Index
-Building Cost Index
Marshall & Swift, Installed Equipment
Cost Index
Nelson, Refinery Construction Cost Index
Chemical Engineering Plant Construction
Cost Index
(B) U.K
Cost Engineers' Cost Index
(C) The Netherland
Duch Annual Composite Cost Index for
Chemical and Similar Plant
(D) Canada
Canadian Index
(E) Germany
Preisindex fur Chemieanlagen
(F) Japan
J.S.I.M. Chemical Plant Cost Index

Type of Cost Index

Civil-Construction
Building
Plant Quipment
Refinery Plant & Equip.
Chemical Plant
Plant
Chemical Plant

Chemical Plant
Chemical Plant

classification.675% 33. for the M&S Installed Equipment Cost Index.8% 12. Instead. I have set the start plot position at 1993 as 100. These plant cost index values are indicated by year on Figure 1. and show the expression of these regression analysis result in Table 2. please refer to references 3 and 4. cost index structure.575% 15. business monitor) 1000 50% Regression Analysis of CE Plant Construction Cost Index 5% * Aadministration technical and clerical (employment gazette) 15% For information on plant cost index conditions. and the sources of the cost data used. in Table 5.0% 10. and supervision.5% simultaneously.9516 100 10 45 55 65 75 85 95 105 year Figure 2 Regression Analysis of CE Plant Cost Index . I was able to be similar to two expressions with 1982 in a boundary.but its elements’ composition and weight percentages are not released at all. 3 and 4 show the result of regression analysis. construction labor.0 point. PLANT COST INDEX VALUES Figure 1 showed the value of CE Plant Cost Index. It includes 47 types of 1210 1110 1010 910 810 710 610 510 410 310 210 110 10 1913 Plant Cost Indexes' Values CE Plant Cost Index M&S.648e R 2 = 0. elements’ weight percentage.60. The cost index has the following cost structures and element weight: 0 . Chemical Plant Cost Index according to the year since the establishment.5575x . for the CE Plant Cost Index. Equipment Heat exchangers and tanks Process machinery Pipe.000% 4. Each Table indicates values from an 10-year period between 1993 to 2002. Figure 2. United Kingdom Figure 1 Various Cost Indexes’ Values In the UK. The CE Plant Cost Index and the M&S Equipment Cost Index are covered in the magazine Cost Indexes' Values The M&S Equipment Cost Index is an equipment and materials related index. for the JSIM Chemical Plant Cost Index. CE Plant Cost Index M&S Equipment Cost Index JSIM Chemical Cost Index industrial equipment cost average indexes. building and engineering.0 37 7 x y = 10. and the constitution element and weight percent largely changed.750% M&S. The values for the plant cost indexes mentioned in the previous section are indicated in Table 3.75% from 2.9025 * Mechanical and electrical (chemical industry. The cost index is composed of the following cost structure and element weight. As a result of regression analysis.56 2 R = 0. cost indexes' values * Civil material (product price. in Table 4.0% 10.Marshall and Swift Installed Equipment Cost Index is known as the M&S Equipment Cost Index.5% 29. for the Cost Engineers’ Cost Index.S.4% Electrical equipment Structural supports and miscellaneous Construction labor Building Engineering and supervision 7. the M&S Equipment Cost Index indicates the average values for eight types of industrial equipment. CE Plant Cost Index was revised in 2001. Installed Equipment Cost Index and J.8% 19. the Cost Engineers’ Cost Index is published by the Association of the Cost Engineers.M. Installed Equipment Cost Index JSIM Chemical Cost Index 1928 1943 1958 1973 1988 2003 Year Chemical Engineering published by McGraw-Hill. business monitor) 5% * Civil labor (employment gazette. construction) y = 4.5% 6. valves and fittings Process Instruments Pumps and compressors 50.The productivity coefficient was revised to 1. and in Table 6.I. As each cost index has a different base year.The CE Plant Cost Index is a composed index that includes data on equipment.

981 2.939 3.385 3.602x − 864.300 18.706 5.297 3.040 3.539 3.I .943 5.418 J.730 2.352 2001 3.570 3.900 0.200 6.848 1.330 3.169 2.300 3.978 5.983 3.256 18.970 3.586 2.104 8.762 1.755 1.247 3.911 0.092 103.342 5.700 3.014 6.881 44.222 2. 0513 x C.9809 0.600 1.974 5.084 0.900 2.227 3.917 1.126 3.247 0.084 0.000 7. Chemical Plant Cost Index Table 2 Result of Regression Analysis of each cost indexes Cost Index year range 1947∼1982 CE Plant Construction Cost Index 1982∼2002 M&S Installed Equipment Cost Index 1913∼1982 1982∼2002 J.8636 C .0377 x C .434 3.933 1.243 3. I .112 1.943 4.978 5.006 1.449 2. Ch e mic al Plan t Cost Inde x Cost Indexes' Values Regression Analysis of M&S Installed Equipment Cost Index cost indexes' values y = .095 17.000 1.771 1.842 11.0 5 1 3 x R 2 = 0 .0 .M.660 1.323 2.886 43.I . CP Cost Index 1993 3.935 1.9809 1 00 0 10000 Re gression An alysis of J.685 1. 1422 e 0 .S.551 9.6 14 x .798 34.873 44.705 2.589 5.602x .300 5.010 2. I .958 2.488 8.100 1.944 2. 2 = 4.I.729 2. 648 e 0 .063 5.593 3.328 9.169 2.242 2.006 1.252 34.898 0.996 0.600 5.831 1. Chemical Plant Cost Index 1975∼1982 1982∼2002 C.751 5.400 3.1 = 1 .072 3. I .941 100.920 2.I.494 34.10 1 3 R 2 = 0 .660 1.407 2.000 34.62 C .298 1.910 45.881 42.M.510 2.000 3.62 R 2 = 0.406 8.662 5.755 1.544 5.665 1. Chemical Plant Cost Indexes’ Values Year  Reactors  Towers  Vessels & Tanks Heat exchangers Pumps & compressors  Machinery  Direct fired heaters Electrical equipment  Instruments Equipment & machinery subtotals Installation Direct fired heaters-brickworks Electrical Instrument Piping Civil Architectual Structual Insulating Painting Overall temporary works Materials & Works subtotals Engineering Project Field expence Insurance Indirect subtotals Administration    J.132 1.135 6.800 2.848 98.348 5.2 = 19.895 2.111 3.268 18.831 12.541 3.007 2.682 1.873 2.223 0.342 5.626 3.052 0.226 17.912 2. 0333 x 0.685 3.950 3.359 3.348 2000 3.9 8 42 y = 19.741 97.561 33.904 3.895 2.687 6.162 0.986 5.741 1.684 2.621 1.000 101.000 2.910 0.021 2.086 0.389 6.967 0.141 2.849 11.483 2.835 7. : cost Index Regression Analysis R2 C .200 2.102 1. 2 = − 0 .820 1.978 3.634 2.516 34.746 .485 6.042 5.862 44.548 8.042 5.494 34.820 1.578 5.868 1.900 3.321 2.724 1. Chemical Plant Cost Index (1995=100) 1995 1996 1997 1998 1999 3.864.700 2.246 2.886 42.105 17.624 1.909 2.S.593 18.1 = 32 .M.188 3.724 6.194 5.I.1 4 2 2e 0 .673 2.S.242 2.380 5.1 = 10 .S.732 11.923 0.599 18.8636 y = 1 .900 0.334 3.M.117 6.056 11.909 2.891 11.I.077 7.970 0.033 3.086 0.307 3.224 2.5575 x − 60 .759 3.325 2.274 0.I.9025 C .544 33.764 2.762 1.566 2.581 3.380 6.654 6.831 3.56 0.071 0.521 3.642 101.527 34.000 9.741 1.300 2.571 2.394 2.707 96.448 5.122 2002 3.098 9.S.847 1.852 98.8 9 93 1000 100 10 1 00 10 13 33 53 73 93 65 113 70 75 80 85 90 95 1 00 1 05 year year Figure 3 Regression Analysis of M&S Equipment Cost Index Figure 4 Regression Analysis of J.481 8. 1149 x 2 + 22 .I.084 0.560 2.704 2.778 2.868 11.984 0.700 11.910 5.9516 0.315 1994 3.332 5.I.678 5. 181 e 0 .912 3.181e R 2 = 0.185 3.912 0. 614 x − 1013 x=Y-1900 0.771 1.099 6.323 2.1 1 49 x 2 + 2 2 .665 1.516 3.417 3.300 45.244 2.280 3.203 7.546 3.670 6.443 34.305 5.460 45.249 3.490 2.021 5.0 3 3 3 x y = 32. I .S.500 3.660 1.0 .916 5.535 6.M.236 5.9842 0.465 19.888 11.800 1.910 0.8993 Y: year Table 3 J.M.992 1.943 0.954 0.546 3.939 3.247 0.733 3.600 5.152 99.895 2.887 11.858 98.630 1.726 3.268 18.911 47.673 2.257 2.982 5.818 2.917 1.167 2.507 8.440 5.996 0.974 5.814 2.

0 96.8 988.0 423.6 133.5 5.2 963.7 5.8 100.4 415.2 1029.8 1092. Installed Equipment Cost Indexes’ Values Year M & S Installed Equipment Cost Index Process industries.9 106.0 15.1 1022.0 Civil Labour 5.0 102.4 15.1 108.4 584.5 1096.5 1322.7 108.2 108.7 108.3 340.2 129.4 1057.5 33.0 % Erection Labour(a) 25.6 632.2 394.8 105.2 332.9 101.3 2001 1093.7 340.5 385.3 1089.0 100.6 988.2 555.2 439.0 % 24.9 1123.7 962.2 433.0 5.0 104.7 1263.5 1039.4 383.4 26.1 1175.8 984.5 999.7 1065.0 99.3 960.2 384.8 1130.6 97.9 972.1 333.0 35.3 1068.6 699.8 1036.5 1023.3 2000 394.1 48.1 1997(from Jan.2 986.6 1232.7 1099.0 Erection Labour(b) 25.0 102.4 5.1 1102.9 126.6 100.4 1012.6 1079.6 139.6 433.9 385.5 363.6 1019.5 365.5 Table 5 Marshall & Swift.4 1031.5 356.1 1126.0 339.0 % 14.0 102.2 1037. milling  Refrigerating Steam Power 1993 964.2 15.1 406.8 1063.6 549.4 1051.0 1011.7 385.3 Mech & Elec Mats & Equipt 50.8 967.9 341.8 1037.3 970.8 1053.8 334.0 287.0 362.8 2002 395.5 2002 1104.4 1062.1 48.4 345.1 969.6 1014.1 97.5 96.0 1266.9 363.6 103.1 413.9 999.8 390.7 374.1 373.4 102.3 437.9 409.5 341.6 427.7 1088.0 342. Des and Admin 1993 1994 96.6 439.4 5.2 110.8 1109.6 108.8 5.0 % 4.1 1142.6 916.9 125.7 1190.5 427.9 600.1 1071.0 5.1 1056.3 346.7 964.4 1045.2 1057.3 311.2 994.5 948.9 1124.0 360.5 961.0 Eng.2 1042.0 Cost Engineers' Cost Index 100.0 1176.9 1147.7 1181.8 5.8 363.5 393.0 989.3 1068.8 302.5 1036.6 437.8 1219.0 Civil & Build Mats 5.0 378.4 1062.0 1083.0 % 48.0 118.8 103.4 1089.1 1069.3 372.4 1000.5 15.8 105.2 315.9 922.9 430.3 357.8 96.4 49.7 391.1 438.7 Table 6 Cost Engineers’ Cost Indexes’ Values Year Mech & Elec Mats & Equipt Civil & Build Mats Erection Labour(b) Erection Labour(a) Civil Labour Eng.9 118.7 95.9 333.3 1150.6 638.1 434.0 % 96.9 15.1 960.2 25.1 1062.1 CE Plant Construction Cost Index(1957-59=100) 1995 1996 1997 1998 1999 381.6 1027.7 515.valves & fittings   Process Instruments  Pumps & compressors Electrical equipment Structural supports & misc.2 115.1 1071.6 1057.2 975.9 1075.1 1102.4 275.7 112.2 1108.5 103.4 991.9 367.3 889.4 111.4 1055.4 326.5 898.9 969.4 370.9 106.1 931.8 5.8 368.8 351.3 1994 368. Des and Admin 15.4 6.9 1159.7 977.2 983. to June) 31.4 6.8 5.1 1078.2 1028.0 25.2 572.7 1107.3 Marshall & Swift Installed Equipment Cost Index(1926=100) 1995 1996 1997 1998 1999 2000 1027.6 96.6 298.7 1030.7 28.6 1020.5 305.7 Cost Engineers' Cost Index(1995=100) 1995 1996 1997 1998 1999 2000 2001 2002 100. average Cement Chemical Clay products Glass Paint Paper Petroleum products  Rubber Related industries Electical power Mining.3 104.1 399.6 373.0 1148.9 961.9 100.2 989.3 1058.4 989.5 16. Construction labor Buildings Engineering & supervision 1993 359.5 15.4 103.3 345.9 1021.8 276.6 520.8 685.6 100.5 102.7 1059.3 392.6 1994 993.9 1109.2 341.8 281.5 494.6 352.0 660.2 114.4 1140.6 2001 394.2 408.3 387.0 431.5 349.2 109.3 363.0 % 4.2 341.2 48.0 1049.4 545.3 1077.1 47.7 1035.3 16.0 370.0 102.3 364.5 50.0 1097.8 1042.2 1121.5 373.0 1037.1 286.7 365.1 102.8 535.6 100.6 1153.7 5.0 6.7 .8 613.6 368.8 5.6 388.4 115.9 341.1 1112.6 102.Table 4 CE Plant Cost Indexes’ Values Year CE Plant Construction Cost Index Equipment Heat exchangers & tanks   Process machinery Pipe.3 1087.3 270.1 272.8 387.0 (a)=Modified Erection Labour (b)=Unmodified Erection Labour 51.8 105.9 94.6 102.5 1122.5 1067.8 1054.3 1109.0 520.7 1003.0 1254.3 48.9 1071.8 381.7 375.5 1090.7 1071.0 1085.5 29.3 120.8 95.9 444.4 1173.6 96.4 649.7 100.1 1110.8 416.5 1299.9 386.0 1098.2 359.8 1124.2 539.3 1027.7 344.7 113.3 1306.9 353.2 467.8 1062.7 5.

This type of calculation is easily make by many software programs.8  100  Overall Plant Cost Cost index trends concerning overall plant costs are shown in table 7. Cost index increase rate in 1994  102.48% = 100   100 cost. Figure 9 displays these trends as a graph. we also obtained the coefficients A0 . CE Plant Cost Index. T = year (1year. and America economy brought this. and the Cost Engineers’ . Cost index increase rate (%) from 1993=100(annual index value/base year index value-1) (1) as. Cost Index Increase Rate (X) Calculation The 2002 cost index’s trend values divided by the 1993 cost index’s trend values provides the cost index’s upward tendency C 2002 C1993 . Figure 5 displays these trends in the form of a graph.984 + 3.78  = 100.0 for the base year of 1993. Cost indexes’ trend value in 1994  2. In contrast. As a result of regression analysis. and finally calculate and analyze cost index values tendencies. The trends for each type of plant equipment are shown in Table 9 for the JSIM Chemical Plant Cost Index and in the Table 10 for the CE Plant Cost Index. As can be seen. In order to compare the JSIM Chemical Plant Cost Index. T = 3 . Equipment of CE Plant Cost Index shows a tendency of a stable rise except Heat exchanger & Tank and Process Instrument. C = 2. Figure 6 displays the same as a graph. and 1002) slowed down. labor [Example calculation] The CE Plant Cost Index increase rate in 1993 is determined as follows: Cost Index reflects the Japanese economic situation (2) Cost Index Increase Rate Trend Value Calculation Cost indexes’ increase rate trends are calculated by expression. I have compared and analyzed the plant cost index trends in four main are Cost indexes’ increase rates are calculated with the formula shown below. (6) CE Plant Cost Index showed a stable rise of constant. besides calculating the cost indexes’ increase-rate trends. and engineering cost. As a whole. T = 1 .) Cost Index Trend Cost index trends can be calculated using equation 5. 2years. Japanese JSIM Chemical Plant and shows a big drop. compare them. As the initial value is set to 100. except Japanese JSIM Chemical Plant Cost Index. Cost Engineers' Cost Index of UK is a tendency of a drop generally. the CE Plant Cost Index displays a remarkably constant tendency. Equipment cost of JSIM Chemical Plant Cost Index is trend of a drop with all types of equipments after 1999. A1 . overall plant cost .160T 2 (4) where C = increase rate of cost indexes’ trend values (%). ANALYSIS OF COST INDEXES TRENDS In the following section. ……….. 3years. ……. These trades are displayed in Figure 7 and 8. But Labor cost of JSIM Chemical Plant Cost Index reflects the Japanese economic situation and shows a big drop.617T − 0.0 + 1 = 102. but these past several years (1000. T = 2 . I will first determine each index’s elements’ increase rate (%) and the increase rate trend. from the cost index increase rate trend determined in the previous section.CALCULATING COST INDEX VALUES TREND As it is difficult to determine plant cost index value trend with only the value mentioned above. Cost index trend from 1993=base year index value (annual index increase rate trend value/(100 +1) (5) [Example calculation] The CE Plant Cost Index trend in 1993 is determined as follows. respectively. plant equipment cost. 1001. Cost Engineers’ Cost Index and JSIM Chemical Plant Cost Index show approximately the same sharp increase trend. all the other values should be calculated in relation to this. Plant Equipment Cost Cost index trends concerning plant equipment cost are shown in Table 8. it is trend of a rise.5  − 1 = 2. and A2 from in the following equation: y = A0 + A1 x + A2 x 2 (3) [Example calculation] The CE Plant Cost Index increase rate trend (1993) is determined as follows. Plant equipment cost is trend showing a slight drop after 1999 except M&S Installed Equipment Cost Index. Construction Labor Cost Cost index trends concerning plant labor costs are shown in Table 11.

3 102.(%)  Cost indexes' increase trend values Cost indexes' trend values Cost Eng.2 109.290+1.6 96.72 9.09 2.8 1062.90 1.2 993.0 102.8 99.4 97.17 5.1 109.10 0.9 112.5 110.47 1.32 7.41 3.4 97.57 14.48 6.43 2.1 102.0 110.1 103.45 8.8 112.1 1056.08 13.4 102.2 108.87 9.983T −1.17 10.3 98.0 106.2 2002 1993 975.1 98.67 1.77 9.2 2002 1993 33.0 99. but I think that a plant cost turns in a rise since 2004.9 101.30 2 (0.60 10.1 100.5 100.45 9.132T C2002 / C1993 = 1.3 395.1 115.66 C = 0.01 10.3 1077.4 107.5 106.90 2.138+2.093 100.6 109.60 6.2 109.(%)  Cost indexes' increase trend values Cost indexes' trend values J.1 394.CP Equip.35 11.89 12.2 100.9 427.4 33.0 34.9 108.2 102.9 103.7 438.8 106.9 107.1 101.17 10.03 6.91 8.62 10.0 105.978 99.43 7.96 C = −2.2 107.2 105.32) (0.25 2.3 1068.07 0. .2 99.6 114. but JSMI Chemical Plant Cost Index shows a drop after 1998.4 107.1 110.9 98.97 1.03 3.8 C2002 / C1993 = 1.4 108.4 34.2 111.86 2.7 99.16 9.12 1.79 2.0 102.95 2 0. even in countries under unfavorable economic conditions like Japan.136T2 0.8 34.7 101.37 (0. average Cost index ( Base year=1993) Cost indexes' increasing rate v. subtotals Cost index ( Base year=1993) Cost indexes' increasing rate v.7 1109.1 101. although slowly.8 103.00 5.0 101.76 2.70 C / C =1.1 97.08 10.97 12.8 109.51 5.74 4.6 101. & Mach.6 110.3 0.(%)  Cost indexes' increase trend values Cost indexes' trend values Plant Cost Indexes' Trend Values(1993=100) C:increase trend formulas C /C 1993 1994 1995 1996 1997 1998 1999 2000 2001 2002 Trend values 2002 1993 359.7 2002 1993 964.063T2 1.089 100.0 102.1 434.4 100.9 111.5 1039.8 381.4 102.4 109. Chemical Plant Cost Index Cost index ( Base year=1993) Cost indexes' increasing rate v.78 4.2 34.3 34.8 102.342+ 2.75 6.12 15.4 111.558T − 0. Japanese plant cost after 1999 shows a tendency of a drop.80 12.9 100.1 1102.20 1.021 Cost Engineers’ Cost Index construction costs at the same level.7 0.4 109.4 111.6 110.83 C = −1.5 0.60 9.9 0.26) 0.05 3.(%)  Cost indexes' increase trend values Cost indexes' trend values M & S−Process industries.3 100.4 102.2 110.70 7.86 13.1 381.9 102.444+ 3. Figure 10 displays these trends as a graph.19 3.37 7.101T + 0.0 34.54 7.0 106.72 2.73 2.98 (0.3 107.221T2 -0.0 102.29 C / C =1.9 109.02 (0.911T −0. CE Plant Cost Index shows the most stable rise.3 104.3 34.0 2002 1993 98.8 110.9 113.7 100.38 9.4 0.7 112.3 1000.4 103.70 14.0 101.6 104.2 96.0 113.1 113.9 113.84 5.4 102.8 99.18 2.(%)  Cost indexes' increase trend values Cost indexes' trend values Equipment Cost Indexes' Trend Values(1993=100) C:increase trend formulas 1993 1994 1995 1996 1997 1998 1999 2000 2001 2002 Trend values C2002/C1993 394.7 104.7 114.84 3.76 10.84) 0.30 0.133 100.0 1121.2 103.0 99.2 368.7 109.27 13.05 6.5 101.60) C / C = 0.2 105.9 386.5 106.37 9.0 106.2 100.32 7.80 2.94 13.02 C = 2. This reflects the Japanese economic situation.13 C = −1.1 96.0 103.9 100.54 10.84 1.20) (1.6 100.422T − 0.065T − 0.8 103.4 103.12 1.229T 2 0.55 6.2 110.75 10.15 9.0 0. Cost Engineers' Cost Index shows a tendency of rise since 1999.I.81 (0.18 C = −2.5 394.00 2.00 2.5 107.0 102.43 11.572+1.0 103.4 109.8 101.42 9.18 10.85 15.4 109.7 110.6 106.02 0.5 102.64 3.70 14.(%)  Cost indexes' increase trend values Cost indexes' trend values J.8 105.8 98.57 7.3 387.29 6.4 109.6 100.4 2002 1993 96.7 102.6 433.I.2 100.65 11.190T − 0.79 9.8 95.M.7 102.97 13.02 C /C =1.4 114.8 115.8 104.7 107.0 100.7 100.Table 7 Plant Cost Indexes’ Trend Values Year CE Plant Construction Cost Index Cost index ( Base year=1993) Cost indexes' increasing rate v.6 100.10 2.3 34.43 1.23 11.39 2.6 101.43 9.15 7.4 1027.108T 99.6 388. influence of deflation in particular and shows a drop.07 3.83 3.2 110.8 110. Cost Engineers' Cost Index shows a tendency of rise since 1999.034T 2 2.3 107.45 2.0 437.2 433.0 103.59) (2.4 99.55 4.9 100.70 11.2 111.3 98.7 114.0 99.2 108.3 113.7 111.05 (1.12 9.84 10.22) 1.1 113.137 100.16 5.1 106.3 2002 1993 Table 8 Equipment Cost Indexes’ Trend Values Year CE Plant−Equipment Cost index ( Base year=1993) Cost indexes' increasing rate v.6 96.06 13.2 111.37 2.19 5.1 100. but JSMI Chemical Plant Cost Index shows a drop after 1998.130T2 0.3 437.7 100. It can be said that labor costs are steadily climbing.6 107.83) /C C = 0.(%)  Cost indexes' increase trend values Cost indexes' trend values Cost Engineers' Cost Index Cost index ( Base year=1994) Cost indexes' increasing rate v.136 101.5 110.1 101.7 111.07) (1.1 102.3 102.969 102.05 13.69 2.91 10.437+ 2.79 9.42 8.25 11.88 3.58) C = −2.2 102. Engineering Cost Cost index trends concerning plant engineering are shown in Table 12.8 102.8 109.S.30 2.1 103.20 8.94 7.9 1104.5 96.0 103.03 2.464− 0.17 8.00 3.4 1051.0 1083.2 105.(%)  Cost indexes' increase trend values Cost indexes' trend values M& S Installed Equipment Cost Index Cost index ( Base year=1993) Cost indexes' increasing rate v.3 106.67 11.8 101.98 6.8 102.3 1089.3 406.87 0.6 103.2 1037.M.9 102.6 106.7 102.4 108.3 1068.00 3.8 109.500T − 0.16 11.0 111.674+ 2.52 C=−2.0 113. CONCLUSION CE Plant Cost Index shows the most stable rise.1 0.S. I have subtracted these costs from the JSIM Chemical Plant Cost Index material and labor costs.6 427.64 0.0 1093.22 C / C = 1.45 14.1 113.0 0.−Mech & Elec Mats & Equipt Cost index ( Base year=1994) Cost indexes' increasing rate v.20) (0.

74) (1.00 1.8 613.2 119.6 102.4 383.72 C /C = 1.1 104.0 102.00 0.1 359.6 104.54 C /C = 1.81 3.2 104.8 334.162T C 2002 / C1993 = 1.90 C = −3.0 99.194 5.920 2.3 CE Plant Equipment Cost Indexes' Trend Values(1993=100) 1994 1995 1996 1997 1998 1999 367.986 2.00 (0.0 100.29 101.4 104.8 100.9 104.1 0.248+ 0.6 101.03 3.22 1.3 385.0 114.4 109.7 104.4 2002 1993 5.1 99.42 0.893+ 1.39 4.6 2.1 103.3 107.9 430.3 2002 Trend values C2002 / C1993 356.7 102.20) (0.59 4.6 102.56 2.68 2.8 109.301T 0.61 0.38 5.3 100.7 107.114T 2 0.2 100.45 13.907+ 2.22 10.4 101.706 5.578 5.3 102.00 (1.388T C 2002 / C1993 = 0.92 7.71 0.02 0.348 5.0 0.244 2.4 2.9 5.93) 0.6 104.0 101.00 1. Chemical Plant Equipment Cost Indexes' Trend Values (1993=100) C:increase trend formulas 1993 1994 1995 1996 1997 1998 1999 2000 2001 2002 Trend values C2002/ C1993 3.5 104.40 4.354 + 2.342 5.4 102.20 (0.209 121.9 99.00 1.13 4.7 101.6 102.8 107.332 5.11 1.5 102.1 333.1 102.99 3.385 3.52 4.839T − 0.0 102.9 103.6 100.04 7.33) (0.3 107.138T 2 (0.1 100.4 378.(%)  Cost indexes' increase trend values Cost indexes' trend values Process machinery Cost index ( Base year=1993) Cost indexes' increasing rate v.7 C:increase trend formulas 2000 370.5 104.23 13.96 1.51 0.63) 0.022 99.4 0.981 2.974 100.2 110.84 113.00 1.59 8.972 98.3 109.2 22.59 1.5 102.6 102.546 3.8 104.46 6.51 0.3 101.943 4.(%)  Cost indexes' increase trend values Cost indexes' trend values Electrical equipment Cost index ( Base year=1993) Cost indexes' increasing rate v.4 2002 1993 1.34 2.83 4.0 360.3 103.0 101.22 C = 0.042T − 0.521 3.0 98.751 5.17) 2 (1.50 13.8 103.84 101.5 107.8 2002 1993 3.26 3.00 10.949T − 0.8 101.0 111.449 5.5 100.38 5.13 8.052+ 0.814 3.94 2.3 101.3 104.989 100.305 5.80) 1.92 3.62 4.1 101.7 103.00 0.4 444.0 107.0 110.6 100.0 101.147T 2 (1.82 9.1 101.1 105.78 118.42 6.53 16.4 2.(%)  Cost indexes' increase trend values Cost indexes' trend values 1993 357.00 0.1 111.63 2.3 0.9 101.042 3.90 3.915+ 2.00 (1.71 C = −1.77 /C C = 1.7 104.11 4.5 2002 1993 2.4 100.42 4.09) 99.7 0.587T − 0.79 109.28 C = −2.7 9.31 2.368T − 0.89 2.317 + 1.141 2.991 100.(%)  Cost indexes' increase trend values Cost indexes' trend values Vessels & Tanks Cost index ( Base year=1993) Cost indexes' increasing rate v.42 0.7 100.00 1.83 4.09 3.I.2 102.0 98.4 105.25 3.23) = 0.05 11.1 14.7 2002 1993 2.M.06 5.91 2.4 103.8 363.868 2.673 5.8 104.500 3.58) 0.20) C = −0.88 5.82 102.2 113.059T 2 0.78 4.1 102.53 3.662 5.66 4.1 104.3 104.48 10.24 0.0 0.07) (0. Chemical Plant Cost Indexes’ Trend Values Year Reactors Cost index ( Base year=1993) Cost indexes' increasing rate v.(%)  Cost indexes' increase trend values Cost indexes' trend values Machinery Cost index ( Base year=1993) Cost indexes' increasing rate v.04 4.5 112.4 115.0 10.6 104.37 1.5 345.8 9.544 5.5 107.45 2.31) (0.3 104.0 103.6 632.10 100.88 C2002 / C1993 = 1.2 106.539 3.033 3.6 112.9 99.222 2.544 5.7 103.52 7.4 106.12 2.006 1.14 3.1 100.2 101.8 (0.010 2.447T − 0.096T 2 =− + − (0.8 103.145 99.013T C 2002 / C1993 = 1.8 341.S.2 1.29 0.7 103.0 423.94 3.0 100.1 2001 363.7 19.516 5.1 108.910 3.4 104.42 1.72 C = −3.4 649.9 105.21 3.71 0.600 5.939 100.25 1.1 103.000 3.634+ 3.00 0.546 100.1 101.16 3.14 8.1 311.912 2.7 104.0 101.05 2.2 109.03 4.9 333.6 101.3 0.62 1.621+1.4 100.242 100.5 113.974 1.08 3.5 102.0 0.448 5.2 384.257 2.038 99.47 2.132T 2 0.6 104.7 102.81 0.(%)  Cost indexes' increase trend values Cost indexes' trend values Pumps & Compressors Cost index ( Base year=1993) Cost indexes' increasing rate v.6 5.4 99.917 2.98 1.3 315.274T − 0.4 105.61 0.M.912 3.1 0.970 3.0 2.6 102.67 9.08 4.3 102.58 1.978 3.7 105.917 100.1 373.9 103.2 122.8 416.28 7.7 2002 1993 2.3 111.3 326.1 107.510 5.00 1.65 1.1 103.66) 2.21 2.00 C = −2.29 9.570 3.54 4.3 372.43) 1.5 365.978 1.26 4.08 3.05 2.8 2002 1993 Table 10 CE Plant Equipment Cost Indexes’ Trend Values Year Heat exchangers & tanks Cost index ( Base year=1993) Cost indexes' increasing rate v.8 107.57 4.8 439.7 99.65 4.900 3.9 101.0 660.3 2002 1993 .822+ 2.0 101.00 (0.1 103.51) (0.93 4.32 3.0 106.342 100.8 101.53 2.0 107.021 3.58) C = −2.8 104.673 100.5 104.27 1.61 4.91 5.07 13.3 101.38 (0.5 106.09 1.65 4.236 5.64) C /C = 0.00 (0.4 114.5 408.111 3.978 1.3 98.9 101.6 102.48 104.0 431.1 108.11 7.96 14.98 7.38 2.8 103.02) 0.34 104.494 5.8 0.73 2.6 102.6 100.7 0.3 103.(%)  Cost indexes' increase trend values Cost indexes' trend values Pumps & compressors Cost index ( Base year=1993) Cost indexes' increasing rate v.71 C /C = 1.037 99.5 439.0 104.30 2 14.200 2.6 104.2 104.32 2.097 109.3 102.0 100.24 4.27 4.4 101.6 114.0 103.11 1.8 109.72 4.09 3.300 5.0 100.4 102.73 5.9 107.28 2.59 2.3 104.5 113.9 105.9 102.2 99.138T C 2002 / C1993 = 1.31 1.224 2.9 102.764 3.28 3.939 3.35 C /C = 1.53 2.157T 2 (0.25 0.71 4.17 2 21.600 5.944 2.0 0.79 7.634 5.90) C = 0.6 108.6 373.9 101.63 12.380 5.10 3.042T − 0.434 3.93 0.1 105.8 104.77 4.3 100.7 102.104T 2 (0.4 112.36 C = −2.5 685.0 0.1 14.2 104.6 1.40 1.242 2.44 0.038 99.1 109.26 C = −2.12 1.7 99.0 103.11 3.11 14.02 C 1.034 100.684 5.6 102.27 4.1 103.33 7.985 /C C 100.71 4.9 699.02 2.6 103.26 C /C = 0.3 101.31) 2.31 4.41 12.5 99.0 100.9 100.8 638.00 0.063 3.03 6.020 99.3 100.3 103.53 116.62 2.87 2.7 104.9 102.57 2.78 7.0 102.7 104.9 105.8 99.5 1.3 104.935 2.0 103.0 100.8 104.0 100.3 102.626 3.72 3.34 101.9 103.67 102.0 1.01 0.81 4.5 391.7 1.527 5.7 100.62 4.14 2.71 1.15 6.58 C2002 / C1993 = 1.34 1.98 2.4 102.96 9.93) 0.40 15.2 101.51 7.2 600.10 102.0 104.042 100.7 3.4 101.43 1.87 5.788 1.(%)  Cost indexes' increase trend values Cost indexes' trend values Electrical equipment Cost index ( Base year=1993) Cost indexes' increasing rate v.61 0.74 7.460T − 0.2 102.992 1.S.4 100.246 2.0 103.3 107.561 5.26 102.10 100.3 103.6 112.5 368.0 0.06 5.(%)  Cost indexes' increase trend values Cost indexes' trend values Heat exchangers Cost index ( Base year=1993) Cost indexes' increasing rate v.848 2.072 3.1 106.040 3.14 6.48 12.08 11.(%)  Cost indexes' increase trend values Cost indexes' trend values Instruments Cost index ( Base year=1993) Cost indexes' increasing rate v.2 105.76 2 9.2 101.00 (0.1 101.16 4.33 4.5 110.76 3.315 + 3.96 3.2 100.12) 1.350 + 2.4 100.000 2.3 102.73 18.135T − 0.9 102.1 111.0 99.2 115.6 108.5 11.3 15.02 102.8 362.982 1.167 2.548T − 0.5 100.134T − 0.(%)  Cost indexes' increase trend values Cost indexes' trend values Towers Cost index ( Base year=1993) Cost indexes' increasing rate v.70) 1.17 5.53 114.67 1.22 9.2 332.3 393.0 341.80 9.61 8.8 584.90 3.2 103.040T 2 0.I.9 103.(%)  Cost indexes' increase trend values Cost indexes' trend values Process instruments Cost index ( Base year=1993) Cost indexes' increasing rate v.7 104.70 3.99 3.64 11.375 + 3.11 C = −1.8 111.70 3.5 102.150 114.57 2.589 5.3 102.00 (1.55 2.900 2.0 99.6 101.73 3.(%)  Cost indexes' increase trend values Cost indexes' trend values J.3 101.54 109.77 3.494 100.4 100.90) (0.36 3.02 2.943 2.1 105.1 103.75 1.00 (0.25 101.147T 2 (0.81 11.(%)  Cost indexes' increase trend values Cost indexes' trend values Direct fired heaters Cost index ( Base year=1993) Cost indexes' increasing rate v.13 2.1 102.87 1.5 100.112T − 0.0 98.2 100.30 2.77 C = −2.6 101.0 99.1 103.39 2.Table 9 J.9 572.53 2.6 101.8 387.31 7.581 3.0 365.

3 0.26 104.5 2002 1993 139.74) (3.9 101.0 102.355T C2002 / C1993 = 1.6 107.9 103.8 276.55 4.23) (2.8 2001 302.61 3.3 C:increase trend formulas 2000 298.112 112.18) 98.9 110.7 109.00 0.67 3.9 96.6 96.3 340.3 99.6 102.2 Labor Cost Indexes' Treand Values(1993=100) 1995 1996 1997 1998 1999 275.4 105.0 0.23) 99. USA.83 29.34) (0.0 30.08) (2.93 3.6 1.2 102.02 2 12.62) 97.1 120 110 100 M&S Cost Eng.83 4.1 286.0 105.2 103.C.18 3.95 103.2 Engineerig Cost Indexes' Trend Values(1993=100) 1995 1996 1997 1998 1999 349.3 97.00 0. CP Labor Cost Index Cost index ( Base year=1986) Cost indexes' increasing rate v.0 7.4 110.8 104.7 113.450T 93. Des and Admin Index Cost index ( Base year=1986) Cost indexes' increasing rate v.43 5.74) (2.158T C2002 / C1993 = 0.41 3.9 107.9 101.12 37.55 7.36) (2. and UK 93 95 97 99 101 103 Year Figure 6 Equipment Cost Indexes’Trend Values of Japan.77 4.34 5.30 2.7 344.20 111.7 106.07 5.2 105.73 100.5 6.−Engineering Cost Cost index ( Base year=1986) Cost indexes' increasing rate v.34) C = 1.1 125.61 2 45.9 123.0 (1.1 38.6 138.254T − 0.99 6.24 2.7 29.74 0.0 0.40 2 0.8 102.2 111.134 113.98 5.735+ 2.(%)  Cost indexes' increase trend values Cost indexes' trend values J.04 (0.7 (0.9 11.9 6.4 1.15) 0.04) (0.4 1.421T + 0.9 12.6 129.41) (1.6 130 Cost Engineers' CE 125 Cost Indexes' Trend Values Cost Indexes' Trend Values M&S 2001 341.9 (4.30 10.86 3.(%)  Cost indexes' increase trend values Cost indexes' trend values Cost Eng.40 6.73 100.2 28.46 /C C = 1.3 10.9 101.995 100.3 107.6 108.8 29.3 30.Table 11 Labor Cost Indexes’ Trend Values Year 1993 270.4 1.6 103.9 103.8 100.32 7.8 104.9 96.05) 1.73 11.06) (3.89 7.6 116.09 6.457 145.60 1.10) 96.92 11.460+1.097T 2 13.21 101.9 100.9 32.55 102.9 (5.3 95.3 1994 272.2 7. and UK .4 28.1 99.9 101.0 CE Plant−Construction labor Cost index ( Base year=1986) Cost indexes' increasing rate v.6 (0.3 108.515+ 0.3 3.94 4.4 103.4 117.0 (0.(%)  Cost indexes' increase trend values Cost indexes' trend values J.7 109.2 109.38 17.8 103.82) 97.91 2.9 104.2 100.0 6.9 3.P.8 103.41 6.(%)  Cost indexes' increase trend values Cost indexes' trend values 29.100T C2002 / C1993 = 0.7 11.83 3.7 6.37 2.6 97.8 7.2 133.M.9 100.55 101.8 97.0 94.3 96.3 100.40 1.7 111.2 100.65 2.3 Equipm ent Cost Indexes' Trend Values Japan vs USA vs UK (1993-2002) 130 CE C:increase trend formulas 2000 340.74 22.34 8.0 30.93 101.683T − 0.6 104.S.8 103.3 113.4 105.5 101.474+ 4.9 118.72 129.06 110.7 Plant Cost Indexes' Trend Values Japan vs USA vs UK (1993-2002) JSIM 2002 Trend values C2002/C1993 345.90 11.34 111.7 102.9 (1.(%)  Cost indexes' increase trend values Cost indexes' trend values 1994 351.1 105.152T + 0.12) 2 (6.−Erection Labour(a) Cost index ( Base year=1986) Cost indexes' increasing rate v.971 97.4 2002 Trend values C2002/C1993 305.58) 99.01 100.I.7 103.0 287.7 0.3 105.42 10.0 13.24 101.3 9.0 342.7 96.12) (3.0 (0.9 102.8 2.76 4.0 (2.55 16.32) (3.4 1.9 111.3 98.1 107.9 101.7 (3.4 106.0 106.77 100.4 6.76 1.98) 2 (2.8 281.51) (2.6 105.5 103.1 106.1 101.0 0.39 5.5 100.8 112. USA.88 C = −0.26 0.1 C2002 / C1993 = 0.7 100.2 6.6 44.8 97.12 109.7 122.1 7.8 144.(%)  Cost indexes' increase trend values Cost indexes' trend values Cost Eng.98) (2.23 102.1 105.57 C = −0.40 2.6 2.7 100.73 5.07 7.799+1.858−1.431T + 0.9 106.9 103.92) C = −4.23 C = −0.73 102.7 CE Plant−Engineerig & supervision Cost index ( Base year=1986) Cost indexes' increasing rate v.3 31.20 137.82 4.54 100.−Eng.90 22.8 29.38 C = −2.06 5.937 Table 12 Engineering Cost Indexes’ Trend Values Year 1993 352.S.67) 99.78) (3.24 5.81 2.3 102.9 96.699T − 0.24 102.73 9. JSIM 120 115 110 105 100 95 90 90 93 95 97 99 101 103 Year Figure 5 Plant Cost Indexes’ Trend Values of Japan.0 102.8 104.2 98.15 1.60 2.I.5 341.2 96.34 9.4 106.M.028T C2002 / C1993 = 1.5 97.8 1.

.odn. _______. Economic Indicators. Kagaku Souchi. Kagaku Souchi (July 1990). Introduction to Cost Engineering. Kogyo Chosakai Publishing Co.Engineering Cost Indexes' Trend Values Japan vs USA vs UK (1993-2002) J SIM CP P lant Equipment Cost Indexes' Trend V a lues J apan P la nt Equipment (No. Kagaku Souchi (December 1987). _______.2) (1993-2002) 130 Ve sse l & Tan ks Dire c t fire d h e ate rs In stru me n ts CE Mac h in e ry Ele c tric al e qu ipme n t Cost Indexes' Trend Values Cost Indexes' Trend Values 110 105 100 95 93 95 97 99 101 103 Yea r JSIM Cost Eng. 6. Jan. each month.Eng. ______. Rotterdam. 120 110 100 90 93 95 97 99 101 103 Year Figure 7 Equipment Cost Indexes’ Trend Values of J. 2002 140. Recent Plant Cost Trend. 7. Chem. _______.0 Yoshimi Saito 110. Plant Cost Index Report. 4. AACE International Transaction 1997.. 15th ICEC Transaction. 3. Yoshimi Saito.2 0 0 2 ) Cost Indexes' Trend Values 140 H e at e xc h an ge rs & tan ks P u m ps & c o m pre sso rs P ro c e ss in stru m e n ts 130 P ro c e ss m ac h in e ry Ele c tric al e qu ipm e n t 120 110 100 90 93 95 97 99 101 103 Y e ar Figure 8 CE Plant Equipment Cost Indexes’ Trend Values Labor Cost Indexes' Trend Values Japan vs USA vs UK (1993-2002) 150. William M. Updating the CE Plant Cost Index. 5.0 Cost Indexes' Trend Values CE Cost Eng. each month 2.S.jp . Cost Engineering and Project Management News. The Cost Engineers. 1989. Yoshimi Saito. Recent Plant Cost Trends. ______.0 130. Kosuto Kougaku Ken’Kusho.ne. The Japan Society of Industrial-Machinery Manufactures. Hiratsuka City 90. Saito. ACE Technical index Committee.0 120.0 93 95 97 99 101 Year 103 Kanagawa 254-0011. 1998.0 193-2 Yoshigiwa. each month. Vatavuuk. JSIM 1.M. 1997 Japanese Chemical Plant Cost Trend. 1996 Japanese Chemical Plant Cost Trends. Japan TEL +81-0463-53-1410 FAX +81-0463-53-1220 Figure 9 Labor Cost Indexes’ Trend Values E-mail yoshimi_saito@pop06.I. Yoshimi. Cost Enginees Index. 8. March 1997. Chemical Engineering.0 Kosuto Kougaku Ken’kusho 100. Chemical Plant Figure 10 Engineering Cost Indexes’ Trend Values REFERENCES C E P lan t Equ ipm e n t C o st In de xe s' T r e n d Valu e s US A P lan t Equ ipm e n t (1 9 9 3 . 10. 9. Mcgraw-Hill.