cost and price indices
TRANSCRIPT
Engineering Costs and Production Economics, 13 ( 1988) 157- 168 Elsevier Science Publishers B.V., Amsterdam - Printed in The Netherlands
157
The latest indices in Table 1 indicate that the erected costs of plants were still increasing as at July 1, 1987 in most countries. Japan is the outstanding exception to the general rule with virtually the same index since 1983, but West Germany and the Netherlands have had very small increases in the same period, and Can- ada and the U.S.A. show increases of 1% to 2% in the five-year period. In the year to July 1, 1987, Norway with 17.3%, Denmark with 8.8%, Australia with 7.5% and Sweden with 7.0% have had the largest increases.
In the international comparison, Table 6, the dominant factor is the effect of the U.S. dollar revaluation relative to other currencies in the year to July 1, 1987. Apart from the Australian dollar which fell by about 3%, the currencies of the other eleven countries rose by from 6% to 22% relative to the U.S. dollar.
The method used to compile the indices has been described in previous articles [l-3]. In brief, a pseudo total erected cost is arrived at by calculating costs of materials, comprising 10 tonne cement, 1 tonne reinforcing bar, 3 tonne steel sections and 6 tonne steel plate, at basic ex-works prices, and calculating total labour costs for 300 hours of mechanical engineering and 230 hours of construction labour. These hours are assumed to be at 100% performance and apply to Japan and the U.S.A. For other countries lower performances for construction labour are assumed, 50% for the U.K., 60% for France, Italy and Norway, 70% for Denmark and Sweden, 75% for West Germany, 80% for Belgium and the Netherlands, 85% for Aus- tralia and 90% for Canada, all wih a resultant increase in the number of hours. The total of
TABLE 1
indices of erected costs of plantsa as at January 1 st, unless otherwise stated ( 1975 = 1.00 1
1976 1977 1978 1979 1980 1981 1982 1983 1984 1985 1986 1986 1987 1987 July 1 July 1
Belgium 1.09 1.16 1.27 1.29 1.40 1.50 1.64 1.89 1.99 2.01 2.06 2.09 2.07 2.10 Denmark 1.02 1.06 1.16 1.27 1.38 1.54 1.64 1.99 2.14 2.19 2.32 2.38 2.41 2.59 France 1.13 1.25 1.34 1.46 1.59 1.82 2.05 2.50 2.73 2.84 2.97 3.04 3.10 3.17 W. Germany 1.03 1.07 1.11 1.14 1.21 1.29 1.38 1.53 1.52 1.56 1.60 1.61 1.60 1.61 Italy 1.19 1.43 1.67 1.92 2.27 2.67 3.15 3.89 4.38 4.71 5.12 5.26 5.31 5.53 Netherlands 1.09 1.14 1.22 1.18 1.24 1.31 1.42 1.54 1.54 1.57 1.59 1.61 1.63 1.61 U . K. 1.30 1.45 1.61 1.76 2.04 2.35 2.56 2.78 2.92 3.10 3.34 3.48 3.56 3.67 Australia 1.15 1.33 1.46 1.57 1.71 1.93 2.15 2.58 2.77 2.91 3.15 3.21 3.36 3.45 Canada 1.20 1.33 1.46 1.56 1.76 1.95 ‘2.24 2.46 2.42 2.47 2.52 2.55 2.57 2.61
Japan 1.11 1.26 1.39 1.50 1.58 1.70 1.79 1.84 1.84 1.84 1.89 1.85 1.87 1.86
Norway 1.10 1.22 1.35 1.45 1.53 1.69 1.79 2.07 2.18 2.20 2.43 2.55 2.73 2.99
Sweden 1.05 1.16 1.24 1.37 1.49 1.67 1.81 2.05 2.26 2.37 2.57 2.70 2.77 2.89
U.S.A. 1.11 1.18 1.27 1.39 1.53 1.68 !.85 1.96 2.09 2.13 2.19 2.08 2.10 2.12
“For method used to calculate costs and indices see Eng. Costs Prod. Econ., 6 ( E 982 ) 272 and, 7 ( 1982 ) 18.
Ql67-188X/88/$03.40 @ I988 Elscvicr Scicncc
TA
BL
E 2
Pric
e in
dice
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r: I
Ord
inar
y Po
rtla
nd
cem
ent
II
Stee
l re
-inf
orci
ng
bar
111
Stee
l se
ctio
ns
(hea
vy)
IV
Stee
l pl
ate
1974
(Pr
ices
pe
r to
nne)
19
75
1976
19
77
1978
19
79
1980
19
81
1982
19
83
1984
19
85
1986
19
87
-
Loc
ai
Firs
t Se
cond
A
nnua
l Fi
rst
curr
ency
ha
lf
half
av
erag
e ha
lf
Bel
gium
I
B.F
r.
920
112
II
11,5
00
75
III
9,80
0 90
IV
13
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78
Den
mar
k I
D.K
r 19
0 11
6 II
1,
610
95
IV
1,95
0 81
Fran
ce
I F.
Fr.
120
112
II
1,08
0 96
II
I 1,
040
100
IV
1,32
0 11
3
W.
Ger
man
y I
DM
67
11
0 II
70
0 85
II
I 64
0 10
5 IV
74
0 95
Ital
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13
4 11
18
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0 75
11
1 15
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0 10
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17
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1
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70
11
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78
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83
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5
130
140
144
150
168
186
237
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252
270
272
68
77
72
74
85
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115
117
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122
102
109
103
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173
163
160
160
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71
76
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76
83
86
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127
133
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167
203
214
232
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242
240
87
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93
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146
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76
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91
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3 10
5 10
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0 12
1 12
7 18
2 20
3 20
3 20
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2
110
116
118
120
131
145
167
177
177
183
184
80
78
77
76
84
83
104
81
86
91
96
109
106
I01
108
106
114
164
132
133
133
125
93
91
85
91
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108
127
122
122
125
126
152
188
210
246
321
394
468
515
549
584
616
83
104
117
135
146
143
155
157
178
209
215
128
154
174
188
207
214
302
304
320
338
359
127
136
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165
188
203
270
308
311
339
350
126
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169
183
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196
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73
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90
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107
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328
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186
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634
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208 99
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272
280
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324
334
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216
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185
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95
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625
634
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U.K
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230
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173
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277
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443
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443
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462
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811
136
144
142
153
183
183
203
203
206
228
226
221
135
157
178
183
236
248
248
279
278
285
307
313
329
132
141
154
167
176
186
186
214
214
230
240
250
260
119
137
154
168
180
199
229
’ 26
8 30
0 31
6 32
8 34
5 35
3 12
i !4
3 15
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6 18
0 20
6 22
8 25
4 2?
7 28
4 29
1 30
4 31
3 12
3 84
2 15
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4 21
1 23
6 26
7 27
2 28
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1 A
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153
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262
262
262
262
269
265
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243
266
266
270
273
270
267
106
112
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67
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79
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66
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1139
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6 12
2 16
5 17
2 17
2 17
7 17
9 18
2 72
73
66
78
81
87
90
12
5 15
2 14
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3 17
0 17
5
119
132
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155
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209
218
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99
91
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128
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121
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152
167
184
206
230
235
240
241
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117
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154
171
190
213
231
248
247
244
188
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462
462
224
212
321
331
255
260
349
361
309
326
324
338
338
340
175
176
267
266
269
269
183
180
71
60
120
116
82
74
280
290
164
176
178
177
346
356
184
189
181
174
173
178
218
214
131
128
232
233
189
195
For
pric
e va
riat
ions
an
d m
ater
ial
spec
ific
atio
ns,
see
Vol
. 5,
pp.
15
9-l
6 1
and
247-
254.
aJ
apan
ese
stee
l pr
ices
ar
e “m
arke
t”
pric
es a
nd a
re n
ot d
irec
tly
com
para
ble
with
the
bas
ic
(pro
duce
r)
pric
es
give
n fo
r al
l oth
er
coun
trie
s.
See
Vol
. 5,
PP
. 24
5-24
cJ.
160
TABLE 3
Indices of average hourly earnings of adulr manuala workers in selected industries ( I974= 100 )
Country ISICb 1974 1975 1976
Oct.
1977 1978 1979 1980
Local currency
Oct. Oct. Oct. Oct. Oct. Oct.
Belgium
France
W. Germany
Italy
Netherlands
U.K.
Australia’
Canada
U.S.A.
Denmark
Norway
351 371 382 5
351 371 382 5
351 3ii
382 5
351 371 382 5
351 37 382 5
35112 371 382 5
35 t/2/3 37 3811213 5
35112 37112 382 5
351 371 382 5
35112 38212 5
35112 382 5
35 371 382 5
B.Fr.
F.Fr.
DM
Lire
GUlldtX
Pound
A.%
Can.%
U.S.$
D.Kr.
N.Kr.
SW&.
(12 months to Dec. I974 )
35112 371 382 5
Yen
157.25 118 131 147 152 165 183
171.89 I08 122 132 137 157 172
133.94 114 125 137 142 156 169
130.07 I16 132 146 150 167 180
12.02 II4 129 145 165 190 219
I1 71 121 136 I52 168 189 208
11.04 115 I35 I53 169 189 227
10.08 115 137 I54 171 195 227
!!.02 106 I15 124 127 128 137
IO.05 105 113 120 126 133 I41
9.89 I08 114 I23 129 135 146
10.00 104 110 117 124 134 144
1486 I22 151 190 232 191 351 I542 124 154 183 205 255 313 1325 124 158 188 210 262 321
1255 125 I58 187 218 279 327
IO.60 115 123 134 141 148 155 10.73 109 120 130 139 147 I54 9.47 II2 120 130 137 143 I53 9.70 114 123 135 148 162 170
1.17 I28 140 150 174 208 247 1.16 130 147 158 184 209 247 1.10 126 140 155 177 207 240 I .04 128 143 157 175 201 247
3.79 I13 127 139 150 173 195 3.73 II2 I28 144 I50 165 192 3.42 I08 123 135 143 157 I75 3.55 112 I28 I41 149 162 181
4.74 II3 128 140 150 161 I86 5.43 116 127 141 152 166 183 5.13 II5 126 136 147 162 176 6.77 119 132 I48 I56 167 I86
I10 122 133 142 I10 120 I35 149 I08 I15 126 136 106 113 I18 127
I54 169 164 Id0 148 164 136 147
(3rdQr) (3rdQr)
26.68 115 129 143 I59 177 I89 27.92 II9 131 542 160 177 191 29.17 114 129 144 160 180 195
22.12 113 137 23.39 118 140 26.39 116 136
153 I”5 151
145 141 141 149
165 168 165
‘ 3 185 173 198 I71 189
(4thQr) (41hQr)
18.50 121 135 20.90 120 132 19.37 II8 130 22.45 I19 133
153 169 151 167 149 I61 I58 170
I85 179 175 190 ( -Dec. 1
I 115.8 1126.1 940.8 722.8
( -Dec. I975 ) ( -Dec. I976 ) (-Dec.1977) ( -Dec. I978 ) ( -Dec. )
112 I21 132 139 154 II8 I26 138 143 150 II4 122 133 139 150 117 132 148 160 172
165 I62 I61 183
‘For Japan, manual and non-manual workers, including holiday pay ( see: Vol. 5, pp. 75-77 ) . bIntemational Standard Industrial Classification: ‘From 1983 onwards, indices apply to May and November. 35 Manufacture of chemicals 35 I Manufacture of industrial chemicals 35i Manufacture of other chemicals
353 Petroleum refineries 37 Basic metal industries 371 Iron and steel basic industries
161
Oct. Apr. Oct. Apr. Oct. Apr. Oct. Apr. Oct. Apr. Oct. Apr.
198 186 189 194
208 200 200 202
221 204 212 210
223 224
216 215
247 249 253 263
284 289 289 296
323 308 323 329
334 327 337 340
146 149 153 151
I53 I54 I59 I56
I59 160 164 162
162 I61 !64
I65
414
385 395 406
477 442
453 484
543 507 523 547
578 542 559 585
I65 164 162 180
I75 172 I71 190
183 I75 172 188
190 177 I74 187
275 272 263 266
295 296 286 289
325 342 306 309
335 369 319 323
210 214 204 215
246 249 244 250
258 265 264 260
270 276 275 272
272 300 273 304 276 306 289 317
149 I57 I56 I61 I58 162 153 I61
443 512 409 476 419 490 448 518
283 313 291 332 282 301 283 306
221 232 226 240 209 219 216 207
I95 206 203 196 182 186 162 170
(IstQr) ( 3rd Qr 1 (IstQr)
233 232 240
196 222 221 209 232 232 209 230 228
(ZndQr) ( 4th Qr 1 (2ndQr)
216 213 231 209 209 224 206 210 220 213 208 219
(-June) ( -Dec. 1 (-June)
177 186 177 I79 182 179
176 I81 I76 201 205 201
_ 372 Non-ferrous metal basic industries 38 I Manufacture of fabricated metal products, excl. machinery 382 Manufacture of m;?chinery excl. electrical 383 Manufacture of electrical machinery 5 Construction
209 214 202 212
228 240 216 228
240 252 222 202
244 256 224 207
I91 197 178 I58
(3rdQr)
204 208 183 169
215 218 192 172
(3rdQr)
220 226 I95 I71
(1st Qr)
210 208 211
246 241 252
258 250 261
199 211 204
( 4th Or 1
233 248 235
(4thQr)
241 252 238
(2ndQr)
203 194 194 203 (-Dec.)
236 228 225 223 (-Dec.)
256 246 240 240 ( -June)
173 I75 I71 198
194 I87 184 213
197 189 186 219
226 226 219 218
229 230 220 220
340 330 340 350
353 346 356 359
164 163 169 166
166 I71 177 166
605 557 580 602
629 590 610 631
193 I80 176 189
194 180 I76 189
352 380 328 328
363 393 345 338
271 276 264 295
285 283 274 302
253 265 231 203
254 272 230 211
225 222 I97 174
(3rdQr)
228 229 200 I75
(JstQr)
263 259 271
269 261 282
255 269 255
(4thQr)
233 232 224 223
361 355 364 370
I69 I71 178 168
659 614 636 661
I93
I81 178
I95
378 406 358 349
295 298 284 313
260 277 233 204
234 230 205 177
(3rd Qr)
270 264 285
268 281 269
(4thQr)
277 269 263 256
( -Dec.)
209 I98 194 225
258 272 260
(2ndQr)
261 252 247 240 (-Dec.)
275 269 259 249 ( -June)
202 189 190 223
206 194 192 224
235 233 228 226
368 360 372 379
I71 173 179 172
662 619 639 664
196
183 179 I95
384R 4llR 373 363
297 300 285 315
265 276 234 211
233 238 207 176
(IstQr)
272 266 287
281 287 281 (2ndQr)
295 285 276 269 (-June)
213 200 192 227
235 239 233 236 228 231 226 231
374 376 364 368 378 385 386 392
178 180 180 183 187 189 I72 176
697R 727 636R 672 6641 702 690 709
198 I97 184 I85 180 I81 197 199
40@ 421 411 455 379 390 374 388
299 310 317 324 303 313 321 330
273 280 2GO 287 240 243 i39 219
238 243 237 238 207 210 181 180
(3rd OrI (1st Qrl
271 301 267 284 295 320
312 329
308 345
306 337
(4th QrI (2nd OrI
298 313
289 302 282 294
283 300
(-Dec.) (-June)
216 219
203’ 202 196 197
233 237
TA
BL
E 4
Indi
ces
of a
vera
ge h
ourl
y la
bour
co
sts
of a
dult
man
uala
w
orke
rs i
n se
lect
ed i
ndus
trie
s ( 1
974
=: 1
00 )
Cou
ntry
IS
ICb
1974
19
75
1976
19
77
1978
19
79
1980
19
81
1982
19
83
1984
19
85
1986
19
87
Loc
al c
urre
ncy
Apr
. O
ct.
Apr
.
Bel
gium
Den
mar
k (
3rd
Qua
rter
of
eac
h ye
ar )
Fran
ce
W.
Ger
man
y
Ital
y
Net
herl
ands
U.K
.
351
371
382
5 35 l/
2 38
213
5 351
371
382
5 351
371
382
5 351
371
382
5 351
37
382
5 35 1
12
371
382
5
B.F
r.
D.K
r.
F.Fr
.
DM
Lir
e
Gui
lder
Poun
d
267.
3 28
7.1
227.
7 25
5.0
32.2
8 33
.50
34.4
2
20.4
3 22
.25
18.9
9 17
.24
18.1
8 17
.09
16.3
2 15
.30
2927
30
84
2677
23
34
17.2
8 19
.53
16.3
8 17
.27
1.60
1.
24
1.41
120
133
149
155
169
187
205
217
230
235
243
110
126
137
145
166
180
198
216
220
226
250
116
128
140
148
160
173
194
208
221
228
233
119
136
15C
15
5 17
2 18
7 20
3 21
6 22
2 23
1 23
5
116
131
145
163
180
192
217
245
264
283
294
119
128
140
157
174
190
212
238
255
274
284
114
128
143
159
179
196
212
246
265
285
304
126
143
160
188
209
242
276
321
355
384
408
127
144
162
182
205
239
270
319
347
365
393
118
138
156
172
193
232
260
301
330
348
373
115
136
154
172
195
227
265
301
338
356
378
108
120
130
133
136
145
154
162
168
174
180
109
118
126
131
139
149
157
164
171
174
182
109
116
126
133
140
152
159
166
172
177
187
104
112
120
128
139
151
157
164
170
174
177
126
166
196
240
303
365
435
509
579
645
703
130
161
192
2 14
26
4 32
4 40
2 46
8 53
7 59
0 65
1
127
162
194
220
272
333
414
482
556
617
677
125
159
190
233
282
334
420
508
574
632
693
116
124
137
143
150
158
164
175
180
195
197
110
122
133
141
151
156
164
175
178
183
185
114
!22
134
141
145
135
162
174
175
179
182
115
124
139
150
163
172
182
192
190
191
193
129
143
153
178
214
254
292
313
347
376
405
157
181
194
231
265
312
356
389
452
501
544
126
142
157
180
214
252
280
305
329
352
391
1.30
12
9 14
3 15
5 17
2 20
0 24
6 27
8 29
5 32
5 34
5 3?
2
245
245
249
251
251
254
237
237
241
238
238
244
301
299
336
290
292
312
311
320
350
416
423’
42
9 39
8 40
2 41
1 38
0 38
7 39
8 38
5 39
2 40
4
181
184
188
181
706
656
680
697
200
186
183
198
189
191
192
195
196
198
181
186
742R
78
2 67
4R
722
706R
75
4 72
4 75
1
202
202
188
191)
18
4 18
6 20
0 20
4
421
439
468
558
558
626
413
419
437
392
404
425
Aus
tral
ia’
Japa
n ( A
nnua
l av
erag
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Nor
way
35
1/2
N.K
r.
30.9
7 ( 3
rd Q
uart
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382
32.7
5 of
eac
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ar )
5
35.1
0
Swed
en
( 4th
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of
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h ye
ar )
35
SW&
. 26
.09
371
30.3
1 38
2 27
.5 1
5
30.7
6
U.S
.A.
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3 4.
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2 6.
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6.21
5
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2 37
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12
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10
92
839
351
U.S
.$
7.51
37
1 7.
61
382
6.82
5
8.95
113
129
141
152
176
198
219
258
278
287
319
321
325
337
112
129
145
153
168
195
222
260
281
293
321
323
344
352
108
123
136
’ 14
5 16
0 18
0 21
3 25
5 28
1 28
1 30
6 30
8 32
9 34
0 11
2 12
9 14
2 15
2 16
4 18
4 22
4 26
2 27
6 31
3 33
7 34
0 34
9 35
8
113
128
140
150
161
186
218
241
257
271
283
288
297
305
118
133
150
165
182
199
237
269
286
301
319
318
322
330
116
127
139
149
168
183
213
232
242
252
258
259
265
270
120
134
151
157
174
192
223
244
219
220
225
232
230
242
113
123
134
144
159
171
181
196
208
216
225
230
233
235
121
131
144
151
159
172
187
196
207
207
219
221
224
223
113
123
135
143
155
167
178
190
198
202
209
207
211
212
117
133
151
164
178
189
207
216
234
238
242
244
251
255
114
139
155
167
165
188
202
227
241
262
278
293’
32
5 34
8’
120
142
157
171
176
201
214
237
255
277
291
300”
32
1 36
4’
118
138
154
168
174
192
207
235
242
263
280
296’
32
2 36
0’
126
146
161
174
192
217
237
249
278
294
339
352d
37
0 39
0d
123
138
148
162
176
205
218
235
256
278
312
324d
34
1 35
gd
122
138
154
167
184
206
223
244
263
291
320
330d
33
1 34
6d
123
141
162
175
192
219
241
251
268
284
314
334d
35
0 36
6d
112
125
136
145
157
172
198
212
230
246
260
259
264
270
112
123
13g
152
168
197
226
252
267
263
272
287
286
287
108
115
126
136
149
166
182
188
203
213
224
227
228
231
108
114
122
129
140
151
166
177
188
190
200
202
207
206
Indi
ces
appl
y at
Oct
ober
of
eac
h ye
ar u
nles
s ot
hetw
ise
stat
ed.
aand
bSe
e T
able
3.
‘Fir
st Q
uart
er.
dSec
ond
Qua
rter
. ‘F
rom
19
83 o
nwar
ds,
indi
ces
appl
y to
May
and
Nov
embe
r.
TA
BL
E 5
Cur
renc
y ex
chan
ge r
ates
a re
lativ
e to
U.S
. D
olla
r
Aus
tral
ia
Bel
gium
C
anad
a D
enm
ark
Fran
ce
W.
Ger
man
y It
aly
Japa
n N
ethe
rlan
ds
Nor
way
Sw
eden
U
.K.
A.$
B
.Fr.
C
an.$
K
rone
F.
Fr.
DM
. L
ira
Yen
G
uild
er
Kro
ne
Krb
na
Poun
d - 19
74
0.69
4 39
.5
0.98
1 6.
13
4.77
2.
62
636
285
2.72
5.
56
4.47
0.
4 1
1975
0.
760
36.5
1.
01
5.68
4.
29
2.44
64
9 29
8 2.
62
5.18
4.
11
0.44
8 19
76
0.80
2 39
.0
0.98
7 6.
07
4.71
2.
51
803
298
2.67
4.
98
4.38
0.
545
1977
0.
905
35.8
1.
05
5.94
4.
94
2.34
88
0 27
5 2.
45
5.30
4.
38
0.57
9 19
78
0.87
1
31.9
1.
16
5.48
4.
53
2.03
85
7 21
5 2.
19
5.25
4.
56
0.52
7 19
79
0.88
7 28
.7
1.17
5.
16
4.21
1.
82
824
213
1.99
5.
01
4.26
0.
472
1980
0.
863
29.1
1.
17
5.60
4.
19
1.85
87
6 21
7 2.
01
4.96
4.
24
0.42
6 19
81
0.86
9 36
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1.19
6.
97
5.30
2.
21
127
219
2.44
5.
66
5.04
0.
49 1
19
82
0.97
7 44
.5
1.24
8.
24
6.52
2.
40
337
244
2.65
6.
41
6.22
0.
572
1983
1.
11
50.4
1.
23
9.10
7.
60
2.54
51
4 23
5 2.
85
7.31
7.
65
0.66
3 19
84
1.15
58
.3
1.30
10
.4
8.81
2.
88
1768
23
9 3.
24
8.24
8.
33
0.76
3 19
85
1.42
58
.2
1.36
10
.4
8.81
2.
88
1866
23
3 3.
25
8.46
8.
47
0.77
1
1986
1.
49
44.7
1.
39
8.10
6.
92
2.18
14
96
170
2.45
7.
36
7.13
0.
676
1986
Ja
n. 2
A
pr.
1 Ju
l. 1
Oct
. 1
1987
Ja
n 2
Apr
. 1
Jul.
1 O
ct.
1
1.47
50
.1
1.40
8.
90
7.50
2.
45
1674
99
2.
75
7.55
1
7.57
0.
692
1.38
47
.0
1.39
8.
60
7.17
2.
33
1588
78
2.
63
7.27
7.
35
0.68
1
1.52
44
.6
1.38
8.
09
6.95
2.
18
1495
63
2.
45
7.45
7.
08
0.64
6 1.
59
42.0
1.
39
7.63
6.
62
2.02
13
96
54
2.28
7.
18
6.90
0.
692
1.50
39
.9
1.38
7.
26
6.35
1.
92
1328
58
2.
16
7.33
6.
73
0.67
0 1.
42
37.6
1.
31
6.85
6.
04
1.82
12
95
46
2.06
6.
84
6.34
0.
623
1.39
37
.9
1.33
6.
92
6.09
1.
83
1323
,4
7 2.
06
6.70
6.
39
0.61
9 1.
42
38.3
1.
31
7.10
6.
15
1.85
13
33
147
2.08
6.
74
6.46
0.
620
‘Ann
ual
rate
s ar
e av
erag
es o
f ra
tes
on t
he f
irst
tra
ding
da
y in
eac
h of
the
fou
r qu
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rs
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ear
and
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rst
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ollo
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ar.
materials and labour costs give the erected costs 20%, for mechanical engineering and con- and the resultant indices are based on January struction, the two classifications used in com- 1, 1975= 1.0. piling the indices. Materials prices (Table 2)
Previous articles, particularly one dealing with costs in the U.S.A. C4], have pointed up
the possible variations in erected costs indices arising from differences between national and regional and local site costs. In the article on U.S.A. costs it was shown that variations for four selected regions ranged from 5% below to 20% above national averages. It was suggested too that it would be prudent to allow a margin of t 10% of the erected cost to cover local vari- ations in rates of pay and construction produc- tivity. This possibility of variatiocn; at specific sites relative to national averages should al- ways be borne in mind.
on the other hand have been quite steady in the same period and most changes could be re- garded as adjustments to bring prices into line with those of competitors. As Table 7 indicates there is a large degree of uniformity in prices for each of the four materials listed, except in the case of Italy. For Japan the indices quoted relate to “market” rather than basic, ex works, prices (see footnote to Table 2).
The increases in the indices of erected costs (Table 1) in the year to July 1, 1987 vary con- siderably from one country to another. Ex- pressed as percentages they are as follows:
Belgium Denmark France W. Germany Italy Netherlands U.K.
0.5 Australia 7.5 8.8 Canada 2.4 4,3 Japan 0.5 0.6 Norway 17.3 5.1 Sweden 7.0 1.9 U.S.A. 1.9 5.5
The relationship of the various currencies to the U.S. dollar in the first three quarters of 1987 are shown in Table 5. Using rates at April 1 to compare the first halves of 1986 and 1987, all currencies listed have appreciated over the year relative to the U.S. dollar, except the Aus- tralian dollar. The percentage changes were as follows:
The average percentage change is 4.9%. These changes are due largely to increased hourly labour costs (Table 4). All thirteen countries show increases, ranging from 2% to
Belgium 20.0 U.K. 8.5 Denmark 20.3 Australia -2.9 France 15.8 Canada 6.0 W. Germany 21.9 Japan 18.0 Italy 18.5 Norway 6.0 Netherlands 2 1.7 Sweden 13.7
The average change is 15.5%. It will be seen there was a degree of stabilis-
ation of the dollar against most of the other
TABLE 6
165
Comparison of erected costs of plants with U.S.A. = I .O, as at January 1st unless otherwise stated
1975 1976 1977 1978 1979 I980 1981 1982 1983 1984 1985 1986 1986 1987 1987
July I July I
Belgium 1.07 I .oo I.01 I.10 I.18 1.36 I.21 0.92 0.8 I 0.72 0.60 0.68 0.83R 0.92 1.03
Denmark 1.06 1.01 0.98 0.98 I.10 I.13 1.05 0.80 0.76 0.72 0.62 0.7 I 0.87R 0.98 I.15
France 0.85 0.93 0.89 0.87 0.96 I .02 1.04 0.82 0.75 0.68 0.58 0.67 0.84 0.90 0.99
W. Germany 1.02 0.98 0.99 I .02 I.12 I .20 I.13 0.88 0.85 0.76 0.64 0.73 0.89 I.01 I.12
Italy 0.86 0.88 0.81 0.82 0.91 I.01 I.01 0.78 0.79 0.74 0.65 0.72R 0.88 1.00 I.11
Netherlands 1.04 1.05 I .05 1.12 1.13 I.18 I.12 0.82 0.82 0.73 0.61 0.69 0.83 0.96 I.06
U.K. 0.77 0.81 0.70 0.72 0.80 0.94 I .08 0.86 0.79 0.68 0.59 0.70 0.80 0.88 0.90
Australia 0.92 0.89 0.94 0.85 0.87 0.84 0.90 0.89 0.86 0.80 0.76 0.67 0.73 0.68 0.78
Canada 0.92 0.95 I .05 0.98 0.87 0.90 0.90 0.92 0.92 0.86 0.8 I 0.76 0.80 0.80 0.85
Japan 0.58 0.55 0.59 0.65 0.82 0.79 0.77 0.73 0.60 0.62 0.58 0.65 0.82 w.94 0.96
Norway I.16 I.16 1.28 1.25 1.29 I.31 1.32 1.07 I .oo 0.92 0.82 0.89 I.15 I.15 1.28
Sweden 1.24 I.18 1.24 I.13 I.19 1.26 1.29 0.99 0.90 0.76 0.70 0.79 0.95 I .03 I.14 U.S.A. - I.0 - --
166
TABLE7
Comparisonofprices, with U.S.A.=l.O.for: IOrdinary Portlandcemenl IISteelre-inforcingbar 111 Steel sections (heavy) IV Sreelplate
1974 1975 1976 1977 1978 1979 1980 1981 1982 1983 1984 1985 1986 1987 isthaif
Isthalf Zndhalf
Belgium I 0.77 0.78 0.77 0.84 0.88 0.91 0.92 0.77 0.77 0.72 0.57 0.63 0.79
ii I.35 I.11 1.02 1.24 I.17 1.08 I.15 0.91 1.08 1.06 0.73 0.82 1.06 iii 1.08 0.87 0.88 0.96 0.90 1.02 0.93 0.73 0.72 0.59 0.47 0.49 0.67 IV 1.53 I.10 0.87 0.94 0.86 0.94 0.90 0.66 0.66 0.63 0.50 0.54 0.91
Denmark I 1.02 1.07 0.92 0.91 0.95 0.93 1.05 0.90 0.77 0.82 0.59 0.65 0.80
ii 1.22 1.26 I.18 I.32 I.16 1.05 I.15 0.93 1.03 1.05 0.85 0.88 1.07 IV 1.38 1.03 0.84 0.85 0.88 0.87 0.82 0.62 0.65 0.64 0.49 0.52 0.92
France I 0.83 0.86 0.84 0.77 0.83 0.93 I.01 0.88 0.80 0.73 0.59 0.64 0.79 ii 1.05 I.13 1.16 I.16 1.25 1.05 I.19 0.98 I.01 0.84 0.73 0.77 I.08 iii 0.94 0.87 0.85 0.83 0.92 0.92 0.92 0.70 0.68 0.54 0.44 0.47 0.67 IV 1.20 1.29 1.09 0.89 0.87 0.88 0.87 0.65 0.69 0.62 0.52 0.54 0.90
W.Germany I 0.84 0.83 0.'4 0.77 0.83 0.84 0.82 0.72 0.74 0.73 0.59 0.63 0.79 ii 1.24 1.14 I.13 I.17 1.20 1.06 1.08 0.90 1.10 C.88 0.73 0.79 1.03 iii 1.06 0.98 0.94 0.93 0.90 0.98 0.86 0.69 0.82 0.62 0.47 0.54 0.65 IV 1.23 1.06 0.94 0.91 0.87 0.93 0.87 0.73 0.73 0.63 0.53 0.57 0.94
ilaiy I 0.55 0.61 0.51 0.53 0.56 0.64 0.68 0.61 0.59 0.57 0.48 0.49 0.62 ii 1.32 0.98 0.95 1.09 1.12 1.08 1.03 0.78 0.76 0.75 0.62 0.73 0.88 iii 1.04 0.89 0.83 0.86 0.88 0.91 0.86 0.61 0.65 0.57 0.48 0.50 0.65 IV 1.21 1.19 0.96 0.87 0.85 0.90 0.87 0.65 0.67 0.63 0.53 0.57 0.90
Netherlands I 0.85 0.88 0.83 0.88 0.92 0.92 0.90 0.79 0.76 0.72 0.61 0.64 0.83 ii 1.33 1.06 1.09 1.26 I.16 1.06 I.20 0.98 1.14 0.93 0.66 0.80 1.03 IV 1.33 1.24 I.13 1.13 0.86 0.88 0.81 0.62 0.68 0.61 0.52 0.55 0.88
U.K. I 0.70 0.78 0.72 0.75 0.84 1.00 1.30 I.21 I.10 0.95 0.74 0.78 0.92 ii 1.05 I.11 1.22 1.20 1.17 I.13 1.41 1.22 1.23 I.17 0.90 1.03 I.15 iii 0.92 0.98 0.89 0.89 0.89 I.17 1.23 1.07 0.83 0.70 0.58 0.65 0.78 IV 0.98 1.05 0.85 0.81 0.86 0.91 0.96 0.74 0.68 0.59 0.49 0.54 0.82
Australia I 1.25 I.14 I.13 1.05 I.08 1.02 1.06 1.14 1.15 I.12 1.06 0.90 0.93 ii I.11 1.23 1.50 1.45 1.42 1.23 1.35 1.47 1.56 1.64 I.41 I.21 1.23 iii 0.97 0.90 0.94 0.86 0.86 0.84 0.90 0.89 0.80 0.70 0.67 0.59 0.63 iv 1.00 0.96 0.98 0.88 0.88 0.84 0.90 0.88 0.82 0.68 0.67 0.60 0.80
Canada I I.11 1.04 I.13 1.09 0.99 0.99 1.02 I.10 1.20 I:25 I.15 I.15 I.16 ii 0.97 I.19 1.34 1.14 0.97 0.90 0.92 0.95 1.06 1.11 0.88 0.93 0.92 iii 0.86 0.83 0.91 0.84 0.75 0.79 0.83 0.84 0.78 0.76 0.69 0.68 0.70 IV 0.83 0.86 0.93 0.88 0.78 0.7e 0.79 0.78 0.76 0.71 0.68 0.68 0.84
Japan I 0.99 0.84 0.81 0.84 I.06 1.02 1.19 1.18 1.03 1.05 0.96 0.98 1.30 IV 0.77 0.75 0.83 0.92 I.14 1.04 0.98 0.91 0.73 0.73 0.70 0.74 1.24
Norway I 1.02 1.07 I.11 1.07 1.05 1.09 I.15 1.07 0.99 0.97 0.81 0.84 0.97 ii I.21 1.37 1.50 1.43 1.22 1.17 1.24 1.12 1.19 I.16 0.85 0.89 1.11 iii I.21 0.99 1.08 I.01 0.90 0.92 0.94 0.75 0.76 0.65 0.43 0.51 0.68
Sweden I 0.92 0.99 0.96 1.00 0.95 0.99 I.05 0.93 0.83 0.74 0.66 0.71 0.87 ii 1.27 1.37 1.43 1.52 1.37 1.33 1.45 I.14 I.12 1.00 0.82 0.87 1.07 iii 1.44 1.04 1.05 0.91 0.87 0.93 0.95 0.75 0.74 0.62 0.53 0.56 0.68 IV 1.67 I.11 0.98 0.80 0.83 0.83 0.80 0.63 0.65 0.60 0.52 0.56 0.92
0.92 1.03 I.18 1.32 0.67 0.70 0.95 1.03
0.91 1.00 1.19 1.32 0.93 1.07
0.91 1.00 I.19 I.31 0.65 0.70 1.00 1.05
0.93 1.03 I.17 1.31 0.68 0.70 0.98 1.04
0.74 0.79 0.71 0.83 0.71 0.74 1.01 1.04
0.97 1.08 I.20 1.25 1.02 1.09
0.95 1.00 I.13 I.16 0.83 0.87 0.86 0.88
0.93 1.06 1.20 I.41 0.63 0.70 0.79 0.87
I.19 1.25 0.93 0.98 0.70 0.72 0.83 0.84
1.52 1.58 I.41 1.37
0.97 I.19 0.72
0.96 1.19 0.74 1.00
I.11 1.33 0.74
1.05 1.30 0.74 1.05
SeefootnoresinTable2.
TABLE 8
Comparison of hourly labour costs, with U.S.A. = I .O
Belgium
Denmark
(3rd Qr)
France
W. Germany
Italy
Netherlands
U.K.
Australia
Canada
Japan (Annual averages )
Norway
( 3rd OrI
Sweden
(4thQr)
ISH.?
351 371 382 5
35112 38213
5
351 371 382
5
351 371 382
5
351 371 382 5
351 37 382
5
35112 371 382 5
3511213 37 38 I/2/3 5
35112 37112 382
5
35112 371 382 5
35112 382 5
35 371
382 5
1974 1975 1976
0.9 I 0.97 I.01
1977 1978 .979 I980 1981 I982 1983 I984 1985 1986 1987 Apr.
Apr. Ckt.
I.10 -1.29 1.36 1.28 0.97 0.74 0.67 0.55
0.94 0.94 I .03 I .05 I.18 1.33 1.00 0.87 0.66 0.68 0.51 0.85 0.9 I 0.99 I .04 I.19 1.28 I.18 0.91 0.76 0.68 0.58 0.73 0.80 0.90 0.98 I.16 1.24 I.21 0.93 0.71 0.64 0.56
0.70 0.73 0.77 0.75 0.90 0.97 0.89 0.63 0.56 0.52 0.44 0.80 0.89 0.93 0.89 I .06 I.13 I.01 0.76 0.70 0.65 0.55 0.63 0.67 0.73 0.74 0.89 0.97 0.90 0.65 0.59 0.57 0.51
0.58 0.69 0.63 0.66 0.80 0.89 0.91 0.68 0.58 0.53 0.45
0.62 0.74 0.67 0.70 0.80 0.83 0.85 0.63 0.52 0.54 0.43
0.59 0.68 0.68 0.71 0.81 0.89 0.89 0.73 0.63 0.57 0.49
0.41 0.46 0.47 0.50 0.59 0.74 0.69 0.55 0.46 0.43 0.39
0.91 0.90 0.95 I.01 I.15 1.23 I.12 0.81 0.74 0.67 0.56
0.85 0.83 0.88 0.89 1.00 1.07 0.94 0.68 0.58 0.62 0.49
0.90 0.92 0.99 1.05 I.21 I .30 I.21 0.90 0.84 0.77 0.65
0.64 0.63 0.69 0.74 0.88 I .02 0.94 0.70 0.63 0.59 0.51
0.59 0.64 0.61 0.64 0.81 0.94 0.96 0.68 0.66 0.62 0.53
0.61 0.69 0.C : 0.64 0.71 0.80 0.78 0.57 0.53 0.58 0.48
0.60 0.67 0.65 0.69 0.78 0.90 0.92 0.71 0.71 0.68 0.59
0.40 0.44 0.43 0.46 0.57 0.72 0.67 0.53 0.53 0.50 0.46
0.85 0.89 0.89 0.95 I .08 I.14 I .06 0.69 0.69 0.61 0.53
0.95 0.95 0.99 I.01 I.13 I .26 I .04 0.67 0.64 0.65 0.32
0.89 0.94 0.99 I .05 I.18 1.33 1.22 0.77 0.80 0.71 0.59
0.72 0.77 0.81 0.91 I .07 I .20 I.1 I 0.86 0.76 0.68 0.57
0.50 0.50 0.41 0.42 0.51 0.64 0.75 0.58 0.53 0.48 0.40
0.40 0.46 0.40 0.41 0.49 0.56 0.62 0.17 0.43 0.43 0.39
0.48 0.49 0.43 0.46 0.54 0.65 0.75 0.58 0.57 0.50 0.42
0.34 0.36 0.31 0.33 0.38 0.45 0.57 0.45 0.41 0.37 0.33
0.84 0.81 0.82 0.74 0.78 0.8 I 0.85 0.8 I 0.71 0.69 0.62
0.82 0.78 0.81 0.73 0.73 0.70 0.70 0.67 0.61 0.59 0.59
0.84 0.81 0.86 0.77 0.78 0.77 0.82 0.79 0.81 0.79 0.73
0.66 0.66 0.71 0.65 0.69 0.67 0.72 0.72 0.68 0.68 0.64
0.80 0.77 0.83 0.75 0.69 0.72 0.73 0.72 0.72 0.72 0.67
0.91 0.91 0.99 0.90 0.81 0.84 0.77 0.77 0.77 0.87 0.79
0.92 0.95 I .04 0.94 0.84 0.89 0.86 0.88 0.91 0.88 0.83
0.91 0.96 I.08 I .03 0.91 1.04 0.97 0.99 0.99 0.85 0.79
0.60 0.58 0.57 0.62 0.80 0.82 0.79 0.72 0.59 0.66 0.62
0.60 0.62 0.61 0.65 0.79 0.76 0.69 0.65 0.50 0.63 0.55
0.56 0.56 0.57 0.63 0.78 0.?9 0.74 0.72 0.60 0.66 0.62
0.33 0.34 0.37 0.42 0.56 0.58 0.54 0.53 0.42 0.48 0.48
0.75 0.75 0.86 0.86 0.93 0.89 0.93 0.71 0.64 0.59 0.50
0.s7 0.95 I.12 I .09 I.17 I.17 I .20 0.96 0.87 0.82 0.71
0.71 0.76 0.89 0.90 I .oo I.10 I .02 0.83 0.75 0.69 0.62
0.78 0.88 0.95 0.86 0.95 I .03 I .05 0.74 0.65 0.54 0.48
0.90 0.98 I .05 0.88 0.96 I.01 I .oo 0.69 0.59 0.55 0.49
0.91 I .02 I.13 I .02 I.12 I.21 I.21 0.88 0.84 0.67 0.64
0.77 0.88 0.99 0.95 I .06 I.14 I .to 0.89 0.78 0.63 0.59
0.62 0.72 0.65 0.70 0.65 0.74 0.62 0.72
0.50 0.5gb 0.65 0.73b 0.61 0.69b
0.53 0.61 0.52 0.57 0.58 0.65 0.45 0.51
0.63 0.73 0.57 0.62 0.75 0.85 0.57 0.66
0.59 0.67 0.54 0.58 0.66 0.74 0.50 0.57
0.58 0.67 0.59 0.64 0.65 0.74 0.62 0.72
0.47 0.52 0.46 0.48 0.51 0.55 0.38 0.41
0.56 0.58 0.52 0.51 0.62 0.62 0.60 0.61
0.63 0.63
0.76 0.71 0.76 0.75 0.73 0.74
0.70 0.86 0.65 0.74
0.70 0.82
0.53 0.64
0.56 0.64’ 0.79 0.87’ 0.72 0.79b
0.57 0.64’
0.57 0.61’
0.72 0.80’
0.67 0.76
0.79 0.87 0.79 0.89
0.83 0.93
0.78 0.89
0.64 0.7gb
0.82 0.97b
0.78 0.95h
0.66 0.72
0.62 0.69
0.71 0.80 0.55 0.62
0.86 0.94 0.74 0.84
I .02 I.13
0.74 0.85
0.78R 0.87 7.691 0.79
~.87R 0.99
0.65 0.73
0.77 0.84 0.74 0.82 0.85 0.99 0.82 0.93
0.51 0.59 0.46 0.57
0.55 0.63 0.41 0.48
0.50 0.56 0.47 0.54
0.58 0.66 0.53 0.62
0.64 0.68 0.72 0.78
0.76 0.8 I 0.71 0.80
0.99 1.00 0.87 0.89 0.96 0.98 0.74 0.77
0.71 0.75b
0.94 I .07b 0.85 0.97h
0.70 0.79’ 0.69 0.78’
0.85 0.95’ 0.84 0.96’
Indices apply at October of each year unless otherwise stated. “International Standard Industrial Classifications: See footnote in Table 3. hFirst quarter. ‘Second quarter.
168
currencies from April t to October 1, 1987 but there was a further fall in the dollar value of about 10% in the last quarter of 1987.
INTERNATIONAL COMPARISON OF ERECTED COSTS
From Table 6 it will be seen that erected costs of plants, compared to those in the U.S.A., were higher in seven countries and lower in three. The main feature illustrated by the Table is the large increase in the relative costs in the year to July 1, 1987. This is due --.,ainly in most countries to the fall in the value of the U.S. dollar, but in the case of Norway the increase in the national index outweighed the’effect of currency changes.
Previous trends would indicate that national indices of erected costs in Japan, West Ger- many, the Netherlands and Canada are un- likely to change appreciably in the next year or two. Belgium and the U.S.A. too are likely to remain fairly stable. At the other extreme Nor- way and Sweden look likely to have annual in-
creases approaching 10% per annum in the immediate future. The remaining five coun- tries should continue at around 5% per annum increase although in the year to July 1, 1987, Denmark at 8.8% and Australia at 7.5% were considerably higher.
Turning to the international comparison, the currency markets will continue in a state of flux until the U.S. dollar is stabilised. The average of the relative costs at July 1, 1987 shown in Table 6 is 1.03, and hence it could be argued that the dollar value in the first half of 1987 was at the right level relative to most other cur- rencies. However in view of the further depre- ciation of the dollar in the last quarter of 1987 it is likely that, at January 1, 1988, relative costs in the other twelve countries will be at their highest at least since 1980/ 1, and for some, such as Australia and Japan, even earlier.
REFERENCES
Engineering Costs and Production Economics, 6( 3) ( 1982) 267-273. Engineering Costsand Production Economics, 7( 1) ( 1982) 13-18. Engineering Costs and Production Economics, 8( 3) (1985) 137-144. Engineering Costs and Production Economics, 1 0( 4) (4 986) 267-270.