Int. J.

Production Economics 84 (2003) 1–16

Cost and scale-up factors, international inflation indexes

and location factors
Donald S. Remera,*, Fernando B. Mattosb
a
Department of Engineering, Harvey Mudd College, 301 E. 12th Street, Claremont, CA 91711, USA
b
Texas Instruments, 5505 Morehouse Drive, San Diego, CA 92121, USA

Received 1 April 2001; accepted 1 June 2002

Abstract

This paper updates and expands upon a previous study (Int. J. Prod. Econom. 54 (1998) 41) on cost and location
factors used in the US and internationally. The current study includes 43 US cost and location factors and 30
international cost and location factors for 12 countries. In addition, cost scale-up factors for a wide variety of
equipment, plants and processes from air pollution abatement to waste-to-energy facilities are presented. This study
reviews the use of these indexes and scale-up factors, and presents caveats for their use.
r 2002 Elsevier Science B.V. All rights reserved.

Keywords: Cost estimation; US and international inflation and location indexes; Cost-capacity factors; Scale-up factors; R factors

1. Introduction of 100. Index values for other years are pro-

portional to the base year in the same ratio as
Project planners and estimators frequently find their cost.
themselves making quick order-of-magnitude esti- The first cost indexes were developed by Carli in
mates of the cost of projects such as the construc- 1750 to determine the effects of the discovery of
tion of a new plant or to estimate the budget for a America on the purchasing power of money in
new Internet startup. If the cost of similar projects Europe. One type of cost index is the inflation
is available, a cost estimator can make adjust- index, which attempts to adjust costs of similar
ments for variables such as time, location and projects during different time periods. The en-
size. These calculations require the use of appro- gineering news record (ENR) index started in 1909
priate cost scale-up and location factors. Cost is the oldest inflation index currently used by
indexes measure the cost of a given project rela- engineers (Grogan, 1994). Scale-up factors are
tive to a basis. An inflation index typically refer- used today for estimating the cost of chemical
ences a base year, which is assigned an index value plants, air pollution control or waste to energy
facilities, for example.
*Corresponding author. Tel.: +1-909-621-8964; fax: +1-
One of the problems in using cost indexes and
909-621-8967. scale-up factors is finding the most appropriate
E-mail address: remer@hmc.edu (D.S. Remer). data to use. The major purpose of this paper is
0925-5273/03/$ - see front matter r 2002 Elsevier Science B.V. All rights reserved.
PII: S 0 9 2 5 - 5 2 7 3 ( 0 2 ) 0 0 3 7 4 - 2
2 D.S. Remer, F.B. Mattos / Int. J. Production Economics 84 (2003) 1–16

to present a large number of indexes categorized to this type of adjustment, as shown in the following
help the cost estimator locate the correct one to equation:
use. This paper will review the use of inflation and
 
location indexes and capacity scale-up factors, the Size2 R
different types available, and some caveats for Cost2 ¼ Cost1 : ð2Þ
Size1
using them.
There are three cases encountered. The most
common case is when Ro1 and we have economies
of scale (Remer and Chai, 1990a, b, 1993a, b;
2. Cost indexes and scale-up factors Remer and Idrovo, 1990, 1993; Remer et al.,
1994; Remer and Wong, 1996). In a few cases,
Inflation indexes track the change in costs such as for single screw, stainless steel extruders
for similar projects for different time periods. where the R factor is 2.60 (Remer and Chai,
Location indexes are used to adjust project 1990b, 1993a) and international airports where the
costs for different locations. Cost capacity factors R factors are 2.90 (Remer and Wong, 1996), there
adjust the cost of similar projects of different sizes are diseconomies of scale and R > 1: For modular
or capacities. Through the use of cost indexes, a type facilities, such as membranes used in water
cost estimator could use construction cost data for treatment, R ¼ 1: Combining Eqs. (1) and (2)
an oil refinery built in Chicago in 1995 with above yields
capacity X to estimate the cost of a similar oil
refinery to be built in Houston in 2001 with  
Inflation Index2
capacity Y : Cost2 ¼ Cost1
Inflation Index1
Inflation and location indexes use a base year
  
or location, respectively, to generate index Location Index2 Size2 R
values. The ratio of the two values used is  : ð3Þ
Location Index1 Size1
the ratio of their costs. A cost estimator uses
the index values for Project 1 (with known
cost) and for Project 2 (with unknown cost) For more details on determining R from a
to calculate the cost of Project 2. The follow- set of data, refer to Remer and Idrovo (1990,
ing equation summarizes the use of these two 1993), Remer et al. (1994) and Remer and Wong
indexes: (1996).

 
Inflation Index2
Cost2 ¼ Cost1 3. Different types of cost and scale-up factors
Inflation Index1
 
Location Index2 Cost indexes can be categorized by compiler
 : ð1Þ
Location Index1 intent, measured cost, industry or location. Com-
pilers use cost indexes for: contractor price,
Cost capacity or scale-up factors are used valuations and general or special purposes. Con-
for estimating the costs of projects of different tractor price indexes measure the change in selling
sizes. In contrast to inflation and location indexes, prices of various types of buildings, such as the
the ratio of the capacities of two similar projects Turner general building index. Valuation indexes
is not usually the same as the ratio of their costs. represent replacement costs, such as the Marshall
Let us assume Project 2 is similar to Project 1, and Swift industrial equipment index. General-
but has twice the capacity. Usually these will be purpose cost indexes cover a broad spectrum
economies of scale, such as for chemical plants. In of a particular industry of a type of cost, such as
this case, the cost of Project 2 will be less than the ENR index for construction. Special-purpose
twice the cost of Project 1. Scale-up factors handle indexes cover a particular industry, such as the
 D.S. Remer, F.B. Mattos / Int. J. Production Economics 84 (2003) 1–16 3

Nelson–Farrar Refinery cost index or the Handy indexes and choose the one that is most
Whitman Public Utilities index. appropriate to his/her project.
Another difference between cost indexes is the
Appendix C contains the following information:
type of cost that is measured. Indexes can measure
labor, construction, operation, equipment, com- * Industry or field;
modities, and other types of project costs. These * Information on references including authors
costs can be further subdivided. For example, a and publishers.
compiler of a construction cost index could
consider engineering, material, labor, and land
costs as sub-costs of construction. Cost indexes 5. Example
can also be categorized by industry, such as
chemical engineering, manufacturing, or biotech- Suppose that in the year 2000, a cost estimator
nology. needed to calculate the construction cost for a new
Cost indexes differ by the location to which they waste-to-energy facility in location 1, with a
apply. Because cost indexes are usually based on capacity of 2000 TPD (waste disposal capacity
data from a specific region, cost estimators should measured in tons per day). The estimator knows
ensure that the indexes apply to the project that a similar facility with 1000 TPD was built in
location. another part of the country, say location 2, in
1995, with a total cost of $70 million. After a
literature search, the cost estimator finds the
4. Notes on using the listings in this study applicable cost capacity factor of 0.90 for waste-
to-energy facilities (Ellsworth and Richard, 1998).
Lists of cost indexes and scale-up factors Using the Chemical Engineering M & S Index, she
are presented in Appendices A–C. Appendix A gets the inflation cost factors of 1089.0 for the year
contains cost and location factors for projects 2000 and 1027.5 for the year 1995. From a location
located within the United States. Appendix B reference source such as Richardson’s, she finds a
contains indexes compiled with international data. ratio of 1.1 for location 2 versus location 1. Using
International indexes for 12 specific countries are Eq. (3):
listed by country name, while those compiled with  
data from many countries are listed under the Inflation Index2
Cost2 ¼ Cost1
location ‘‘worldwide’’. Appendix C summarizes Inflation Index1
references for scale-up factors for specific industries   
Location Index2 Size2 R
or facilities. 
Location Index1 Size1
Appendices A and B contain the following
information about each index: she obtains
   
* Index name; 1089:0 1:1 2000 0:9
Cost2 ¼ ð$70 millionÞ ;
* Cost measure; 1027:5 1:0 1000
* Location (Appendix B); Cost2 ¼ $138 million:
* Industry;
* Compiler information: includes address, Therefore, the estimated rough cost of the new
phone and FAX number, email and web waste-to-energy facility is $138 million.
address);
* Index availability: includes how often index is
updated, where it can be obtained, and cost of 6. Caveats
subscription/copy;
* Description: contains extra information to * Inflation indexes are statistically weighted
allow the reader to differentiate between two composite averages, and thus, should only be
4 D.S. Remer, F.B. Mattos / Int. J. Production Economics 84 (2003) 1–16

used for ballpark or order-of-magnitude calcu- * Inflation index calculations become increasingly
lations. inaccurate as the time interval between data
* Inflation indexes are usually limited in scope to points is increased, i.e., a 5-year calculation
a particular industry or industrial segment. As is usually more accurate than a 20-year escala-
noted by Miller (1995), the ENR construction tion.
index may be misapplied in the process in- * Some inflation indexes are based on published
dustries (Park, 1973). The ENR index was list prices (rather than market prices) and time-
intended for use with civil engineering projects averaged labor conditions. These indexes can be
involving large quantities of unskilled labor, insensitive to short-term economic cycle swings.
which may not be the case for process plants or * Scale-up factors should only be used in the
process plant equipment. capacity range for which the factors were
* Inflation indexes measuring similar types of cost developed. The factors can sometimes be used
may be constructed of different weighted outside these ranges, but the accuracy is not as
averages of sub-costs. For example, the Bureau reliable. In some very limited cases, the scale-up
of Labor Statistics compiles two Employment factors may change because of different tech-
Cost Indexes for various types of workers, one nology or field erection versus factory assembly,
for benefits and the other for wages and salaries for example.
(Monthly labor Rev., 1995). Examining the
cost measured by a particular inflation index 7. Summary
and how the index is calculated increases
the probability of an accurate cost estimate Inflation, location and scale-up factors are
calculation. powerful tools in performing order-of-magnitude
* Some indexes do not account for technological cost estimates. This paper reviews their use and
changes in design and construction. As technol- presents about 70 cost and location factor listings
ogy progresses, the cost weightings for a and 9 scale-up factor references to assist estimators
particular index can change, which may or in locating these data. We included an example
may not be reflected by the inflation index. For calculation using cost, location and scale-up factors.
example, production technology developments Caveats for using these factors are also presented.
may shift manufacturing costs from labor to
plant equipment. An inflation index that tracks Appendix A
manufacturing cost may not adjust to these
changes. Estimators should always check the Cost and location factors for the United States
applicability of cost indexes used in their are given in Table 1.
calculations.
* Inflation indexes compare costs for products
Appendix B
that evolve over time. Comparing the costs of a
chemical plant constructed today versus 20
International cost and location factors are given
years ago should reflect not only the increased
in Table 2.
cost of materials, but also the additional cost of
government-mandated environmental equip-
ment. Cost estimators should be aware that Appendix C
some inflation indexes do not adjust for these
additional costs. Sources for capacity factors are given in Table 3.
Table 1
Cost and location factors for the United States

Index name Cost measure Industry Compiler information Index availability Description

Academic Library Operation Education Research Association of Washington, Compiler (annually) Measures the inflation affecting the
Price Index 2605 Klingle Rd. NW, Washington, DC operation of academic libraries. Used
20008, (202) 966-3326 as a component in the Higher
Education Price Index. Index data to
1976.
ACCRA Cost of Cost of General ACCRA, P.O. Box 407, Arlington, VA Compiler (annually) Presents data in two forms:
Living Index (COLI) Living 22210, Phone: (703) 522-4980, FAX: membership: $95 for Composite Index and Average
(703) 522-4985, sam@accra.org, professional Prices. Composite Index is composed
www.accra.org, For Index info: members, $350 for of six components, including housing
www.coli.com business members and health care. Average prices
reports median, mean, standard
deviations and range for 59 costs.
Taxes not considered.
Associated equipment Equipment Construction Associated Equipment Distributors, 615 Compiler (annually) US nationally averaged rental rates
distributor’s Rental Rates West 22nd St., Oak Brook, IL 60523, CED Magazine. for construction equipment items as
compilation of Phone: (630) 574-0605, FAX: (630) 574- Subscription: $25.00 reported by distributor members of
averaged rental rates 0132, info@aednet.org, www.aednet.org yearly association. No geographic
for construction breakdown. Data for each year
equipment released the following May.
Association of Construction Railroad Association of American Railroads, Compiler (quarterly Includes two rail cost indexes: Rail
American Railroads Economics and Finance Dept., 50 F. St., or annually). Contact Cost Recovery Index (RCR) and the
Railroad Cost Index Washington, DC 20001, Phone: (202) Clyde Crimmel at Rail Cost Adjustment Factor
639-2334, FAX: (202) 639-2986, (202) 639-2309, or (RCAF). Components include labor,
www.aar.org send email to fuel, materials, supplies, and other
ccrimmel@aar.org operating expenses.
Austin BCI Building Industrial The Austin Company, 6095 Parkland Engineering News- Derived by periodically repricing a
Blvd., Cleveland, OH 44124-4186, Record (quarterly typical one-story steel frame
Phone: (440) 544-2600, FAX: cost roundup). industrial building of 116760 ft2 and
(440) 544-2684, Compiler (quarterly). an office building of 8325 ft2.
Austin.info@theaustin.com, Wall Street Journal Includes labor and basic material
www.theaustin.com (daily). Bulletin of the costs including site work, electrical,
National Assoc. of mechanical, HVAC, concrete
D.S. Remer, F.B. Mattos / Int. J. Production Economics 84 (2003) 1–16

Purchasing Agents foundations and floors, sprinklers,

(quarterly) and plumbing. Since 1913.
B2B Web Price Index Web Services General NetB2B.com, New York, NY, BtoB magazine Long-running national benchmark
(212) 210-0402, www.netb2b.com (bi-monthly). $59 of how much marketers can expect to
subscription pay for Web services. Participating
developers are sent the descriptions
of services, and return the prices they
would charge their clients to develop
the projects. The results are then
aggregated into the median, high,
5

and low prices.

 6
Table 1 (continued)

Index name Cost measure Industry Compiler information Index availability Description

Bid Price Index Construction Highway- US Department of Transportation, Price Trends for Tracks cost of current prices for base
Federal Federal Highway Administration, 400 Federal-Aid Highway period quantities. Derived from
7th Street, SW, Washington, DC 20590, Construction average unit bid prices for
(202) 523-0163, www.fhwa.dot.gov (quarterly); Survey of excavation, surfacing, and structures.
Current Business Restructured when necessary.
(monthly); Quarterly since 1972. Annually, since
Engineering News- 1962.
Record (quarterly
cost roundup);
Highway and heavy
construction
(quarterly); Highway
statistics (annually)
Boeckh Building Cost Building General E.H. Boeckh Co., 2885 South Calhoun Boeckh Building Cost Index data for 11 building types in
Index Road, P.O. Box 510291, New Berlin, WI Index Numbers. $130 202 US and 53 Canadian cities,
53151-0291, Phone: (800) 285-1288, per copy. Engineering calculated from weighted cost
FAX: (262) 780-0306, www.boeckh.com News-Record changes of 115 components, 19
(quarterly cost building labor trades, 89 building
roundup). One-year materials, and 8 tax and insurance
subscription $74.00 elements.
Boeckh Building Cost Building General E.H. Boeckh Co., 2885 South Calhoun Boeckh Building Cost Modifier is calculated for 11 building
Modifier Road, P.O. Box 510291, New Berlin, WI Modifier Numbers. types in 190 US cities, from weighted
53151-0291, Phone: (800) 285-1288, $130 per copy. cost changes of 115 elements in each
FAX: (262) 780-0306, www.boeckh.com Engineering News- location, 19 labor trades, 89 building
Record (quarterly materials, and 7 tax and insurance
cost roundup). One- elements.
year subscription
$74.00
Bureau of Labor Employment General Bureau of Labor Statistics, US Employment and Provides annual average data on
Statistics and earnings Department of Labor, Office of Public earnings (monthly). industry, employment, hours, and
Employment and Affairs, Postal Square Building, 2 Also, at website earnings for all 50 states, DC, Puerto
Earnings for States Massachusetts Ave., NE, Room 4110, stats.bls.gov/ Rico, Virgin Islands, and 265 major
D.S. Remer, F.B. Mattos / Int. J. Production Economics 84 (2003) 1–16

and Areas Washington, DC 20212, (202) 691-5900 ecthome.htm labor areas.

stats.bls.gov
Bureau of Labor Employment General Bureau of Labor Statistics, US Employment and Includes monthly and annual figures
Statistics and earnings Department of Labor, Office of Public earnings (monthly). for all employees, production
Employment and Affairs, Postal Square Building, Also, at website workers, weekly earnings, weekly
Earnings for the 2 Massachusetts Ave., NE, stats.bls.gov/ hours, hourly earnings, overtime
United States Room 4110, Washington, DC 20212, ecthome.htm hours, and women workers.
(202) 691-5900, stats.bls.gov
Bureau of Labor Producer Construction Bureau of Labor Statistics, US Producer prices and Nine categories of construction
Statistics Producer price machinery and Department of Labor, Office of Public Price Index (monthly) equipment and machinery, including
Price Index— equipment Affairs, Postal Square Building, portable air compressors and parts.
construction 2 Massachusetts Ave., NE, Room 4110, Based on direct price reporting of
machinery and Washington, DC 20212, (202) 691-5900 typical transaction and list prices
equipment stats.bls.gov generally from manufacturer to
distributor. Monthly, since January
1947.
Bureau of Construction General Bureau of Reclamation, Denver Federal Compiler (quarterly); Compiler’s release covers 34 types of
Reclamation Center, P.O. Box 25007, 5th Ave. and Engineering News- dam and water projects. ENR
Kippling, Denver, CO 80225, (303) 445- Record (Bi-annually). publishes the Bu-Rec’s general
2784 Publications also property index that measures costs
available through US for office and maintenance buildings
Government associated with its projects.
Bookstore at:
bookstore.gpo.gov/
index.html
Chemical Engineering Construction Plant (chemical) Chemical Engineering, McGraw-Hill, Chemical Engineering Specifically for a chemical process
Plant Cost Index Inc., 1221 Avenue of the Americas, New (Bi-weekly); US plant, but used throughout the
York, NY 10020, Phone: (212) 512-2000, Bureau of Labor process industry. Cost components
www.mcgraw-hill.com Statistics survey of include equipment, machinery, labor,
hourly earnings building materials, engineering, and
(monthly); BLS supervision costs. Productivity
National Survey of corrections for wages/salaries and
Professional, engineering services.
Administrative,
Technical, and
Clerical Pay
Consumer Price Index Goods Consumer Bureau of Labor Statistics, US BLS press release Measures average changes in prices
Department of Labor, Office of Public (initial). Consumer of about 400 goods and services
Affairs, Postal Square Building, 2 Prices and Price Index bought by wage earners and clerical
Massachusetts Ave., NE, Room 4110, (monthly). BLS workers, both families and single
Washington, DC 20212, (202) 691-5900, supplements persons. Weightings based on
stats.bls.gov (annually). More info periodic surveys. Annually and
at stats.bls.gov/ monthly, since 1913.
cpihome.htm
Dept. of Commerce Construction General Bureau of the Census, Construction Construction reports Combination of various cost indexes
Composite CCI Statistics Division, US Dept. of (monthly); weighted monthly to the current-
Commerce, Washington, DC 20233, Construction review relative importance of major classes
D.S. Remer, F.B. Mattos / Int. J. Production Economics 84 (2003) 1–16

www.census.gov (bi-monthly); of construction. Publishes two

Engineering News- construction-related indexes. First, a
Record (quarterly composite fixed-weight index is a
cost roundup); or get ratio of the annual value of new
historical data (1964 construction put in place in current
to 1999) at: dollars to comparable values in 1992.
www.census.gov/pub/ This index reflects only a change in
const/C30/ price. The second reflects changes in
indexes.html prices and also changes in the
composition of value put in place.
This reflects market conditions
7
Table 1 (continued) 8
Index name Cost measure Industry Compiler information Index availability Description
as well as price. Both published
monthly.
Dept of Commerce Construction Railroad Interstate Commerce Div., Bureau of the Compiler (annually) A series of indexes that trends
Schedule of Annual Accounts, Washington, DC 20423 reproduction cost changes in railroad
Indexes for Carriers property and equipment. Cost
by Railroad components include grading, tunnels,
bridges, ties, rail, locomotives, and
freight cars. Indexes applicable to
national average only. Since 1915.
Dodge Building Cost Construction General Marshall and Swift, 1617 Beverly Blvd, Dodge Unit Cost Components include labor (22
Index Los Angeles. CA 90026, Phone: (800) Guide. $79.95 trades), material, and equipment
526-2756, (800) 262-4729, costs includes crew sizes,
www.marshallswift.com productivity rates, individual prices
for hard-to-find items, and location
factors for 1000 regions in US and
Canada included. Compiled
quarterly.
Engineering News- Construction General Engineering News-Record McGraw- Engineering News- Applicable to structure construction.
Record Building Cost —structure Hill, Inc., Two Penn Plaza, New York, Record (weekly). Obtained by weekly repricing of a
Index cost NY 10121-2298, Phone: (212) 512-2000, One-year subscription hypothetical block of construction in
dominates FAX: (212) 904-2820, www.enr.com $74.00 20 US cities and 2 Canadian cities.
Includes skilled labor, structural steel
shapes, cement and lumber.
Engineering News- Construction General Engineering News-Record, McGraw- Engineering News- Applicable where labor costs are a
Record Building Cost —labor cost Hill, Inc., Two Penn Plaza, New York, Record (weekly). high proportion of total cost.
Index dominates NY 10121-2298, Phone: (212) 512-2000, One-year subscription Obtained by weekly repricing of a
FAX: (212) 904-2820, www.enr.com $74.00 hypothetical block of construction in
20 US cities and 2 Canadian cities.
Includes skilled labor, structural steel
shapes, cement and lumber.
Engineering News- Labor Wage rate Engineering News-Record, McGraw- Engineering News- Data obtained by averaging current
D.S. Remer, F.B. Mattos / Int. J. Production Economics 84 (2003) 1–16

Record Common Hill, Inc., Two Penn Plaza, New York, Record (weekly). wage rates for common labor on
Wage Rate Indexes NY 10121-2298, Phone: (212) 512-2000, One-year subscription buildings and other construction and
FAX: (212) 904-2820, www.enr.com $74.00 by averaging rates for bricklayers,
carpenters, and structural
ironworkers in 20 US cities.
Engineering News- Labor Wage rate Engineering News-Record, McGraw- Engineering News- Covers skilled labor wage rates,
Record Skilled Wage Hill, Inc., Two Penn Plaza, New York, Record (weekly). based on base rates and fringe
Rates NY 10121-2298, Phone: (212) 512-2000, One-year subscription benefits, in dollars per hour for 20
FAX: (212) 904-2820, www.enr.com $74.00 cities in the US and Canada.
Factory Mutual BCI Building Industrial Factory Mutual Engineering and Compiler (semi- Includes 8 labor trades and 7
Research, P.O. Box 7500, Johnston, RI annually) materials. Based on construction of
 02919, information@fmglobal.com, 5 model buildings ranging from a
www.factorymutual.com single story, steel-framed warehouse
to a multi-story, reinforced concrete
building. Used for heavy industry
construction. Biannually, since 1940.
Also indexes for residential
construction, industrial processing
machinery and equipment. Canadian
indexes available.
Fru-Con BCI Building Industrial Fru-Con Corporation, 15933 Clayton Compiler (monthly) Based on an average industrial
Rd., Ballwin (St. Louis), MO 63011, building in St. Louis region.
Phone: 1-800-9FRUCON, FAX: 636/ Components include current labor
391-4513, www.frucon.com and materials costs (fridges, concrete
mortar, clay, lumber, plastics,
metals, paint, and glass). Weightings
adjusted if needed.
Handy-Whitman Construction Public Utility Whitman, Requardt and Associates, Compiler (annually) Treats construction costs separately
Public Utility CCI 2315 Saint Paul St., Baltimore, MD for electric, gas, water, and telephone
21218, Phone: (410) 235-3450, FAX: utility construction. Weightings and
(410) 243-5716, Baltimore@wrallp.com, components revised when needed.
www.wrallp.com For 6 US geographical regions in 48
contiguous states. Since 1912. There
is also an index for a reinforced
concrete building.
Higher Education Operation Education Research Association of Washington, Compiler (annually) Measures the price level of goods and
Price Index 2605 Klingle Rd. NW, Washington, DC services colleges and universities
20008 purchase for their current education
operations. Index data available to
1961.
JOC-ECRI Industrial Raw Industry Economic Cycle Research Institute, 420 Compiler. Journal of This index is designed to yield a
Price Index materials Lexington Avenue, Suite 1645, New Commerce: cyclical leading indicator of the
York, NY 10170, Phone: (212) 557-7788, www.joc.com inflation cycle. Made of 18
FAX: (212) 557-9874, components divided into 4 sub-
www.businesscycle.com indexes: Petroleum products, metals,
textiles and miscellaneous. Created in
1986 and revised in 1994.
D.S. Remer, F.B. Mattos / Int. J. Production Economics 84 (2003) 1–16

Lee Saylor BCI Building General Saylor Publications, Inc., 9420 Topanga Compiler (monthly). Components include 9 types of labor
Canuon Blvd., Suite 203, Chatsworth, Construction costs: and 23 materials costs quoted in 20
CA 91311, Phone: (800) 624-3352, FAX: $69.95 per copy cities. A Labor-Material Cost Index
(818) 718-8024, www.saylor.com weighted at 54% labor and 46%
materials. Subcontractor Index also
available for 21 materials. Monthly.
Lee Saylor went bankrupt in 1995.
Index now compiled by Saylor
Publications, Inc.
9
 10
Table 1 (continued)

Index name Cost measure Industry Compiler information Index availability Description
Marshall and Swift Equipment General Marshall and Swift, 1617 Beverly Blvd, Marshall Valuation Represents a composite of the
Industrial Equipment Los Angeles. CA 90026, Phone: (800) Service (monthly). equipment costs of an entire plant
Cost Index 526-2756, www.marshallswift.com $289.95. Valuation based on a national average. Covers
Book (quarterly). 48 industries with the general average
$149.95 for all. Since 1913. Also available for
18 Canadian cities.
Marshall and Swift Building General Marshall and Swift, 1617 Beverly Blvd, Commercial Allows user to quickly estimate costs
Commercial Building Los Angeles. CA 90026, Phone: (800) Estimator 7. $649.95 on nearly 250 commercial, industrial,
Estimator Software 526-2756, www.marshallswift.com retail, agricultural or institutional
buildings including all classes, sizes,
shapes and quality levels.
Marshall and Swift Building Industrial, Marshall and Swift, 1617 Beverly Blvd, Marshall Valuation Index is an average of 100 US cities
Building Cost Index Appraisal Los Angeles. CA 90026, Phone: (800) Service (monthly). combined into various regional,
526-2756, www.marshallswift.com $289.95. Valuation district, and national indexes. Tracks
Book (quarterly). costs of 5 types of buildings in
$149.95 various parts of US: fire-proof steel,
reinforced concrete, masonry, wood,
and pre-engineering steel frames.
Components include materials,
equipment and labor. Since 1901.
Means Building Construction General R.S. Means Company, Inc., P.O. Box CostWorks software. Tracks construction costs for 16
Construction Cost 800, 63 Smiths Lane, Kingston, MA Allows user to access components in 305 US cities and
02364-0800, Phone: (800) 334-3509, industry-standard Canadian cities and 50 components
FAX: (800) 632-6732, www.rsmeans.com Means construction for New York, Houston, LA,
costs. $99.95 Chicago, and Boston. National
averages for 30 largest US cities
included.
Means Assemblies Complete General R.S. Means Company, Inc., P.O. Box CostWorks software. Tracks assemblies costs for 16
Cost Building 800, 63 Smiths Lane, Kingston, MA Allows user to access components in 305 US cities and
Assemblies 02364-0800, Phone: (800) 334-3509, industry-standard Canadian cities. National averages
FAX: (800) 632-6732, www.rsmeans.com Means construction for 30 largest US cities included.
costs. $149.95
Means Concrete and Construction General R.S. Means Company, Inc., P.O. Box CostWorks software. Cost facts for virtually all concrete/
D.S. Remer, F.B. Mattos / Int. J. Production Economics 84 (2003) 1–16

Masonry Cost 800, 63 Smiths Lane, Kingston, MA Allows user to access masonry estimating needs, from
02364-0800, Phone: (800) 334-3509, industry-standard complicated formwork to various
FAX: (800) 632-6732, www.rsmeans.com Means construction sizes and face finishes of brick and
costs. $99.95 block. Unit cost section contains
more than 8500 selected entries.
Means Electrical Cost Construction General R.S. Means Company, Inc., P.O. Box CostWorks software. More than 15,000 unit and systems
800, 63 Smiths Lane, Kingston, MA Allows user to access costs with design tables.
02364-0800, Phone: (800) 334-3509, industry-standard
FAX: (800) 632-6732, www.rsmeans.com Means construction
costs. $99.95
Nelson–Farrar Construction Refinery Oil and Gas Journal, 1421 S. Sheridan Oil and Gas Journal. Components include process
Refinery Construction Rd., Tulsa, OK 74112, Phone: (918) 835- Subscription: $49.50 equipment, electrical machinery,
Cost Index 3161, Fax: (918) 832-9290, print, $79.50 online instrumentation, heat exchangers,
ogj.pennnet.com/cd anchor home/ materials, and labor costs. Since
1926.
Nelson–Farrar Operating Refinery Oil and Gas Journal, 1421 S. Sheridan Oil and Gas Journal. Measures inflation effects on refinery
Refinery Operating Rd., Tulsa, OK 74112, Phone: (918) 835- Subscription: $49.50 operating costs. Components include
Cost Index 3161, Fax: (918) 832-9290, print, $79.50 online fuel, labor, chemicals, maintenance,
ogj.pennnet.com/cd anchor home/ and investment costs.
Producer Price Index Goods Producer Bureau of Labor Statistics, US BLS press Covers all commodities produced or
Department of Labor, Office of Public release(initial). imported and sold in US primary
Affairs, Postal Square Building, 2 Producer Prices and markets. Listed separately and by
Massachusetts Ave., NE, Room 4110, Price Index groups, such as crude materials and
Washington, DC 20212, (202) 691-5900, (monthly). BLS finished goods. Based on sales of
stats.bls.gov supplements large lots in the primary market,
(annually). More info reported by survey. Data since 1890.
at stats.bls.gov/
ppihome.htm
Research and Goods Education Research Association of Washington, Compiler (annually) Measures the inflation affecting
Development Price 2605 Klingle Rd. NW, Washington, DC university research funding and
Index 20008 expenditures. Index data available to
1961.
Richardson Cost Labor Construction Richardson Engineering Services, Inc., Compiler (semi- Tracks average labor rates for
Trend Reporter P.O. Box 9103, Mesa. AZ 85214-9103, annually) various types of construction crews.
Phone: (480) 497-2062, FAX: (480) 497- Averaged for the entire US. Enables
5529, www.resi.net detailed labor cost estimation for
construction projects.
Richardson Location Construction Richardson Engineering Services, Inc., Compiler (semi- Provides location factors based on
International Factors P.O. Box 9103, Mesa. AZ 85214-9103, annually) typical process plants for 14 major
Construction Factors Phone: (480) 497-2062, FAX: (480) 497- process industry locations around
5529, www.resi.net the world.
School Price Index Operation Education Research Association of Washington, Compiler (annually) Measures the price level of goods and
2605 Klingle Rd. NW, Washington, DC services purchased by primary and
20008 secondary education institutions.
Smith, Hinchman and Building General Smith, Hinchman and Grylls, Inc., 455 Engineering News- Based on compiler’s cost experience
Grylls BCI W. Fort St., Detroit, MI 48226, (313) Record (quarterly on buildings constructed in eastern
D.S. Remer, F.B. Mattos / Int. J. Production Economics 84 (2003) 1–16

227-0100, www.smithgroup.com cost roundup); cities. Cost components include

Compiler (quarterly) labor, material, labor productivity,
plant and management efficiency,
competition and price trends. Since
1902.
11
 12
Table 2
International cost and location factors

Location Index Name Cost Measure Industry Compiler information Description

Australia Australian Builder Raw materials General Australian Builder Publishing Co. Pty. Ltd., 332 Albert St., Publication includes price information
East Melbourne, Victoria 3002, Australia on raw materials. Covers current
prices.
Australia Building Cost Index Building General The Australian Institute of Quantity Surveyors, P.O. Box 534, Monitors construction labor and
Crows Nest, NSW 2065, Australia, (02) 43-1277 materials costs together. Adjusts for
productivity changes. Monthly, since
1949.
Australia Construction Cost Index Building General Amax Australia Limited, 200 St. George’s Terrace, Perth, Components include houses, office
WA 6000, Australia blocks, workshops, ore cars, and ore-
handling structures. Quarterly since
1967.
Australia Cordells Building Cost Book Building General Cordells Building Publications, P.O. Box 96, East Melbourne, Covers present price information for
Victoria 3002, Australia non-residential building for each state
in the Commonwealth of Australia.
Australia Monthly Summary of Statistics Price, Wages General Australian Bureau of Statistics, Wing 5, Cameron Offices, Indexes include price indexes for
Chandler Street, Belconnen ACT 2617, Phone: (300) 135-070, manufactured products, materials used
FAX: (300) 135-211, www.abs.gov.au in manufacturing industry, materials
used in house building in six state
capitals, metallic materials. Also wage
rates and average weekly earnings.
Governmental statistics.
Brazil A Construcao Construction General A Construcao, Rua Anhais, 964, Sao Paulo, SP 01130, Covers residential and non-residential
Brazil construction costs and project costs.
Published in Portuguese.
Brazil Boletim de Custos Building General Boletim de Custos, Rua Dana Mariana, 2, Botafogo, Presents cost and price indexes for
Rio de Janeiro, RJ, Brazil, boletim@montreal.com.br, residential and non-residential
www.montreal.com.br/boletim construction. Published in Portuguese.
Brazil Conjuctura Machinery, equipment, General Instituto Brasileiro de Economia, Fundacao Getulio Vargas, Covers industrial machinery, industrial
construction material Praia de Botafogo, 188, Rio de Janeiro, RJ, Brazil, equipment, and construction material.
www.fgv.br/institucional/ibre.cfm Published in Portuguese. Data may be
obtained through: FGVDados
Fgvdados.fgv.br/index.cfm
Brazil NTC—Associacao Brasileira Transportation rates General Associacao Brasileira dos Transportadores de Cargas, SAS Covers transportation rates for
dos Transportadores de Quadra 06, Ed. Camilo Cola, 10o Andar, Brasilia, DF 70070, industrial materials. Published in
Cargas Brazil, Phone: (061) 321-7172, FAX: (061) 323-3960, Portuguese.
www.abtc.org.br
Brazil Revista de Precos Construction General Revista de Precos, Av. N.X. de Copacabana, 749 GR 801, Presents cost and price indexes for
Rio de Janeiro, RJ, Brazil residential and nonresidential
D.S. Remer, F.B. Mattos / Int. J. Production Economics 84 (2003) 1–16

construction. Published in Portuguese.

Canada Statistics Canada Construction capital General Statistics Canada, Prices Division, Tunney’s Pasture, Ottawa, Covers construction costs and capital
expenditures Ontario K1A 0T6, Canada, www.statcan.ca expenditures. Bibliography in French
or English upon request.
England A.C.E. Indexes of erected plant Nonresidential construction, General The Association of Cost Engineers, Ltd., Lea House, 5 Components include mechanical and
costs machinery, equipment Middlewich Road, Sandbach, Cheshire XW11 1XL, United electrical materials and equipment,
Kingdom, Phone: (44) (0) 1270-764798, FAX: (44) (0) 1270- civil and building materials, labor, and
766180, www.acoste.org.uk construction equipment and transport.
Annual since 1975.
England Price Index Numbers for Nonresidential construction General Department of Industry, Economics and Statistics Div., 4A Government compiled index for
current cost accounting machinery equipment Sanctuary Buildings, 16-20 Great Smith St., London SW1P replacement cost use. Indexes track
3D8, England nonresidential construction,
machinery, and equipment. Annual,
since 1938.
France Index coefficients Building, material General Roux S.A., 51 Rue Ampere, 75017, Paris 766-43-97, France Covers building and machinery
replacement costs. Each release covers
10 yr.
Germany Fachserie 17: Preise Machinery, construction General Verlag W. Kohihammer GmbH, Abt., Veroffentlichungen des Covers general machinery and building
Statisticschen Bunde, Samtes Phillipp-Reis-Strasse 3, Postfach construction. Monthly, for 10 yr.
42 11 20 D-6500, Mainz 42 (Hechtssheim) (06031) 59344 Published in German.
Italy Index Labor, wages, construction General Index Centro Statistica Aziendale S.r.l., Via A. Baldesi 20, Covers wholesale prices, labor costs,
50131, Firenze 055-576041, Italy wage rates, and railway car production
costs. Construction costs tracked for
residential and road construction.
Published in Italian.
Italy Indicatori Mensili Price General Instituto Centrale di Statistica, Via Cesare Balbo, Roma 16- Covers industrial, commercial, and
00100, Italy consumer prices. Compiled by the
Italian Government. Published in
Italian.
Italy Prezzi Informativi Delle Opere Construction consumer prices General Camera di Commercia Industria Artigianato e Agricoltura di Indexes cover residential and
Edili in Milano raw materials wage rates Milano, Directtore Redazione, Amministrazione, Via nonresidential construction, consumer
Meravigli 9/B1S, 20123, Milano 02-88541, Italy prices, raw materials, and wage rates.
Published in Italian.
Japan Construction Price Index by Construction Insurance The Non-Life Insurance Institute of Japan, 6-5, 3-Chome, Covers buildings of wood, steel, and
year, Price Indexes of general Kanda, Surugadai, Chiyoda-Ku, Tokyo, Japan reinforced concrete frame
machinery and equipment construction, general machinery and
equipment, household personal
properties, and location factors for
nine cities. Used by industrial insurers
in Japan. Published in English.
Japan MRC Monthly Standard Construction General Management Research Society for Construction Industry Cost indexes for many components of
Building Cost Indexes and construction and construction costs of
Unit Price Data Bulletin certain building types. Location
indexes for nice cities. Published in
Japanese.
Mexico Cifras de la Construccion Construction General Camara Nacional de la Industria de la Construccion, C/O General use index tracks construction
Sociedad Mexicana de Ingeniaria Economica y de Costos, industry. Published in Spanish.
A.C., Palacio de Mineria Tacuba, No. 5, D1g, Cuauhtemoc, Monthly, since 1960.
DF 510-42-75, Mexico
Mexico COSTOS Construction General Centro de Precios Unitarios Prisma, S.A. de C.V., Paseo de la COSTOS is a monthly publication
Reforma No. 36, C.P. 06048 D.F. Mexico, Phone: (52) 5-566- with 3500 detailed unit costs, 8000
8166, www.prisma.com.mx material costs for each of the three
largest cities, 70 material costs for
another 51 cities, and cost indexes.
Mexico Indice Nacional de Precios al Consumer Price General Banco Nacional de Mexico, C/O Sociedad Mexicana de Consumer Price Index. Monthly, since
Consumidor Ingeniaria Economica y de Costos, A.C., Palacio de Mineria 1978. Published in Spanish.
Tacuba, No. 5, D1g, Cuauhtemoc, DF 510-42-75, Mexico
Netherlands Die Werkgroep Begrotings Construction Chemical Nederlands Stichting Voor Kostentechniek Stichting, Covers unit prices for chemical plant
D.S. Remer, F.B. Mattos / Int. J. Production Economics 84 (2003) 1–16

Problemen in de Chemische Nederlandse Apparaten, Voor de Procesindustrie, P.O. Box construction in the Netherlands.
Industrie 443, 2260 AK Leidschendam, 070-200400, The Netherlands Annual averages included. Every 2
years, since June 1959. Published in
Dutch.
New Zealand Ministry of Works and Construction General Ministry of Works and Development, P.O. Box 12, Wellington Construction Cost Index, components
Development Construction North 041, New Zealand include labor, material, and plant
Cost Index costs. Quarterly, since 1946.
13
 14
Table 2 (Continued)

Location Index Name Cost Measure Industry Compiler information Description

New Zealand Monthly Abstract of Statistics Various General Department of Statistics, Aorangi House, 85 Molesworth St., Labor force indexes for
Wellington, New Zealand manufacturing, chemical, canning/
food, electronic, and mining industries.
Exchange, interest, and national wage
rates, Consumer Price Index, and
manufacturers or producers selling
price indexes included. Monthly, since
1977.
Tanzania Producer Price Index Producer Prices Manufacturing President’s Office, Planning Commission, Bureau of Statistics, Measures producer prices in
Dar-es-Salaam, Tanzania manufacturing industry. Quarterly.
Worldwide Monthly Bulletin of Statistics Various General Statistical Office, UN, New York, NY 10017 Includes variety of production, trade,
population, labor, financial,
commodities, construction, wage, and
miscellaneous cost and price indexes
and statistics for approximately 190
countries. Published monthly, varied
time periods for each index.
Worldwide OECD Economic Outlook Various General OECD Economics Department, 2 Rue Andre-Pascal, 75775 Covers Consumer Price Indexes, labor
Paris Cedex 16, France trends, wage rates, interest rates,
imports and exports, private and
public consumption, and investment
for individual OECD countries.
Worldwide Richardson International Construction Processing Richardson Engineering Services, Inc., P.O. Box 9103, Mesa. Currently covers heavy processing
Construction Factors- AZ 85214-9103, Phone: (480) 497-2062, FAX: (480) 497-5529, plant construction in 14 different
Location Cost Manual www.resi.net countries, countries covered expected
to be expanded. Factors include labor,
taxation, shipping, and environmental
issues. Based on data from surveys.
D.S. Remer, F.B. Mattos / Int. J. Production Economics 84 (2003) 1–16
Table 3
Sources for capacity factors

Industry/field Paper Reference Description

Air-pollution control Air-pollution control: estimate the cost of Remer et al. 16 types of air pollution control equipment including
equipment scaleup (1994) particulate control devices, gas-control devices, and auxiliary
equipment.
Airport construction Cost scale-up factors for airport Remer and Cost capacity factors for US airport expansions and
construction Wong (1996) international airport construction.
Biopharmaceutical Cost-estimating factors for Remer and 58 types of bioprocess equipments.
processes biopharmaceutical process equipment Idrovo
(1990);
Remer and
Idrovo (1993)
Process equipment Design cost factors for scaling-up Remer and 75 types of process equipment.
engineering equipment Chai (1990b,
1993a)
Process plants Estimate costs of scaled-up process plants Remer and 200 types of process plants, primarily chemical plants
Chai (1990a,
1993b)
Chemical plants Rapid estimation of plant costs Gallegher Methods to quickly calculate total installed plant costs, as well
(1967) as costs of installed process sections, buildings and service
systems.
Gas conditioners Estimating the size and cost of gas Vatuvuk Cost estimation of cyclones, wet and dry coolers, spray
conditioners (1981) chambers, quenchers and dilution ports.
Waste-to-energy facilities Cost-to-capacity analysis for estimating Ellsworth and 48 plants in the US used to calculate cost capacity factor.
waste-to-energy facility costs Richard
(1998)
D.S. Remer, F.B. Mattos / Int. J. Production Economics 84 (2003) 1–16

Some notes on capacity factors:

d Also known as scale-up factors or R factors;
d Used to estimate the cost of similar plants, processes or equipment of different capacities or sizes;
d The above table indicates the references that summarize specific industries.
15
16 D.S. Remer, F.B. Mattos / Int. J. Production Economics 84 (2003) 1–16

References Processing and Design, Vol. 44. Marcel Dekker, New York,
pp. 14–39.
Ellsworth, Richard, K., 1998. Cost-to-capacity analysis for Remer, D.S., Chai, L.H., 1993b. Process equipment, cost
estimating waste-to-energy facility costs. Cost Engineering scaled-up. In: McKetta, J.J. (Ed.), Encyclopedia of Chemi-
40 (6), 27. cal Processing and Design, Vol. 43. Marcel Dekker,
Gallegher, J.T., 1967. Rapid estimation of plant costs. New York, pp. 306–317.
Chemical Engineering 74 (26), 89. Remer, D.S., Idrovo, J.H., 1990. Cost estimating factors
Grogan, T., 1994. Cost history: indexes hit by high lumber for biopharmaceutical process equipment. Biopharm 3 (9),
prices. Engineering News Record 28, 46. 36.
Miller, A.C., 1995. Selection of a cost index. Cost Engineer’s Remer, D.S., Idrovo, J.H., 1993. Process equipment cost,
Notebook, AACE International, March 1995, p. 1. biotechnology and pharmaceutical. In: McKetta, J.J. (Ed.),
Monthly Labor Rev., 1995. US Department of Labor, Bureau Encyclopedia of Chemical Processing and Design, Vol. 43.
of Labor Statistics, Vol. 118(4), April. Marcel Dekker, New York, pp. 294–306.
Park, W.R., 1973. Cost Engineering Analysis. Wiley, New York. Remer, D.S., Wong, C., 1996. Cost scale-up factors for airport
Remer, D.S., Chai, L.H., 1990a. Estimate costs of scaled-up construction. Cost Engineering 38 (2), 24.
process plants. Chemical Engineering 97 (4), 138. Remer, D.S., Low, B.L., Heaps-Nelson, G.T., 1994. Air
Remer, D.S., Chai, L.H., 1990b. Design cost factors for scaling- pollution control: estimate the cost of scaleup. Environ-
up engineering equipment. Chemical Engineering Progress mental Engineering Supplement to Chemical Engineering
86 (8), 77. 101(11), EE-10.
Remer, D.S., Chai, L.H., 1993a. Process plants, costs of scaled- Vatuvuk, W.M., 1981. Estimating the size and cost of gas
up units. In: McKetta, J.J. (Ed.), Encyclopedia of Chemical conditioners. Chemical Engineering 88 (2), 127.