Since its introduction in 1963, the Chemical Engineering Plant Cost Index (CEPCI) has served as an important tool for chemical-process-industry (CPI) professionals when adjusting process plant construction costs from one period to another. The CEPCI consists of a composite index assembled from a set of four sub-indexes: Equipment; Construction Labor; Buildings; and Engineering & Supervision. Each index and subindex is the weighted sum of several components. Most of these components correspond to Producer Price Indexes (PPIs), updated and published monthly by the U.S. Department of Labors Bureau of Labor Statistics (BLS; Washington, D.C.; www.bls.gov). According to BLS, the PPIs track the average change in net transaction prices that domestic producers in the mining, manufacturing, agriculture, and forestry sectors, as well as selected services industries, receive for the products that they make and sell. The price quotations that the BLS uses to build these indexes come from a statistically chosen sample of representative transactions obtained from a statistically chosen sample of representative producers in each 600 or so industries. From these several thousand indexes, 41 PPIs have been selected as inputs to the CEPCI and sub-indexes. These PPIs cover products that are important for CPI plant construction, including carbon steel plates, fans and blowers, concrete pipe, and lighting fixtures, and many others.
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For more than46 years, chemical process industries (CPI) professionals engineers, managers, and technicians have used Chemical Engineerings Plant Cost Index (CEPCI) to adjust process plant construction costs from one period to another. This index rather, indexes, as it consists of a composite index and eleven subindexes has received such wide acceptance that it has even been written into constructioncontract, costescalation clauses.
Many CPI professionals, however, are still accessing these numbers the slow way, shuffling back through library archives for the old reference values and waiting for print copies of Chemical Engineering to arrive in the mail with the most recently calculated numbers.
CEs Online CEPCI provides an easy way around such hassles, granting access to the entire CEPCI database, including all annual archives (1947 to present) and monthly data archives (1970 to present). And, instead of waiting more than two weeks for the print or online version of Chemical Engineering to arrive, subscribers to the Online CEPCI can access new data as soon as it is calculated. See how it is calculated here.
Practical costengineering articles. A selection of helpful costestimation articles that have run in past issues of CE are also provided. Click here for one that describes how the CEPCI is calculated.
Each month,Chemical Engineeringpublishes the latest values for the Chemical Engineering Plant Cost Index (CEPCI) a widely used resource for plant construction costs. The CEPCI is calculated using various data from the U.S. Bureau of Labor Statistics. Once a year, we calculate and publish an annual average value, which for 2017 was 567.5.
Based on an average of the monthly values for the Chemical Engineering Plant Cost Index (CEPCI), the annual average value for 2018 is 603.1. The total represents a 6.3% rise over the annual value from the previous year. The percentage gain from 2017 to 2018 is greater than the increase from 2016 to 2017, which was 4.8%. Previous average annual values for the CEPCI are as follows: 567.5 (2017); 541.7 (2016); and 556.8 (2015). In addition to the overall CEPCI annual average for 2018, we also calculated the annual 2018 averages for each of the subindexes that make up the CEPCI (Equipment, Construction Labor, Buildings and Engineering & Supervision). Those individual subindex values can be found on the CEPCI website.
Moving ahead to 2019, the first preliminary value for the year (January 2019; the most recent available) also shows an increase over the final December 2018 value of the CEPCI. In January, gains in the Equipment, Engineering & Supervision, and Buildings subindexes offset a decrease in the Construction Labor subindex. The overall CEPCI preliminary value for January 2019 stands at 7.4% higher than the corresponding value from January 2018.
Meanwhile, the Current Business Indicators (CBI) numbers for the chemical process industries (CPI) show a small decrease in the CPI output index for February 2019, as well as a small decrease in the CPI operating rate. Producer prices for industrial chemicals rose in February 2019. These data can be found in the April issue of Chemical Engineering magazine.
Chemical Engineering, a trade magazine forchemical engineers,contains the Chemical EngineeringPlant Cost Index (CEPCI) and other economic indicators. The magazine can be accessed online through one of the library'sdatabases; however,a few issues may nothave thepage containingtheCEPCI and other indicators you need.If that occurs, you'll need to consult the print version.
After clicking on Chemical Engineering (Online) above, select ABI/INFORM or EBSCO Engineering Source. Once Engineering Source loads, click the "+" sign next to the year needed along the right side.Then select the month/issue.After you locate theissue/month, go to the very last last few pages of that issue for the 1-page section you need, which is titled "Economic Indicators." You could also search the keyword phrase "economic indicators" within an issue too. Once you locate "Economic Indicators," you can click on the PDF to save or print that page. If not in EBSCO Engineering Journals, tryABI/INFORM.Please Note: The CEPCI for a particular month runs about 3-4 months behind the publication date of the magazine.
NOTE: Due to COVID-19, the areas with the print version of the magazine may be inaccessible. If you are unable to locate the CEPCI you need in the online version as describedabove,please contact me at [email protected] for assistance.
If you are unable to locate the page you need online, then consult the print inEvans Library. As mentioned, the "Economic Indicators" section ison the last few pages of each issue. Current issuesof the print , are located in the Current Periodicals area on the 1st Floor of Evans Library in the reading Room under TN1.M45.Older issues of Chemical Engineering (i.e., 2015 and older) are on the 3rd Floor also under TN1.M45
NOTE: Beginning May 2012, the Marshall & Swift Equipment Index is no longer available in Chemical Engineering and we have no other sources for that index. Older values for Marshall & Swift can be found in issues prior to May 2012.
The chemical engineering plant cost index correlates well with macroeconomic factors.Current oil prices and current and past interest rates are the independent predictors.These predictors may also reflect market conditions, inflation and unit labour costs.The correlation is accurate within 3% over the period 19582011 and 1% over 20042011.Forecast of the index from expected interest rates and oil futures contracts is given.
The chemical engineering plant cost index (CEPCI) is widely used for updating the capital costs of process engineering projects. Typically, forecasting it requires twenty or so parameters. As an alternative, we suggest a correlation for predicting the index as a function of readily available and forecast macro-economic indicators:
CEPCI(n)=0.135CEPCI(k0)expAk=konik+BPoil+C, with k0 the first year of the period under consideration, ik the interest rate on US bank prime loans in year k, and Poil the US domestic oil price in year n. Best fit was obtained when choosing distinct sets of values of the constants A, B and C for each of the three periods 1958 to 1980; 1981 to 1999; and 2000 to 2011. These changes could have resulted from the impact of the oil shocks in the 1970s and very high interest rates in the 1980s, which perhaps heralded changes to the index formula in 1982 and 2002. The error was within 3% in any year from 1958 to 2011, and within 1% from 2004 to 2011 after readjusting the weighting of the price of oil. The correlation was applied to forecast the CEPCI under different scenarios modelled by the Energy Information Administration or predicted from oil futures contracts.Get in Touch with Mechanic