Chemical Engineering July 2023 - 43

Engineering Practice
Changes to Calculation Inputs for CEPCI Due
to Discontinued Data Series
Discontinued series IDs associated with producer prices for storage tanks requires a
modification to the CEPCI
Scott Jenkins
Chemical Engineering
T
he Chemical Engineering
Plant Cost Index (CEPCI) is
a widely used tool for comparing
plant
construction
costs
in the chemical process industries
(CPI) between different time
periods since 1963. Over its history,
the underlying details of the index
have been revised and adjusted several
times. For discussions of those
changes, see Refs. 1 and 2.
The source data on which the
CEPCI is
calculated, namely producer
price index (PPI) data, come
from information collected and published
by the U.S. Bureau of Labor
Statistics (BLS; Washington, D.C.;
www.bls.gov), which is a part of the
U.S. Department of Labor. For more
information on the collection and
reporting of producer price indices,
see the box on p. 44.
Periodically, the BLS makes
changes to the data that they collect
and report, some of which necessitate
changes in how the CEPCI is calculated.
For additional background
on how the CEPCI is calculated, see
the box at the right of this page.
One such change is reflected in
this month's CEPCI data, which can
be found on p. 48. The change revolves
around data on industrial storage
tanks and pressure vessels, and
is discussed in this article.
Storage tank series IDs
Storage tanks and pressure vessels
are important components of many
CPI plants and are included in many
capital construction projects at plant
sites. The CEPCI has traditionally
included several inputs from PPIs
having to do with tanks and vessels,
including storage tanks of different
sizes (at ambient pressure), pressure
tanks and vessels, and metal
tanks and vessels that have been
custom-fabricated at a factory and
field-erected. In the past, these mulTABLE
1: CATEGORIES OF TANKS AND VESSELS ALONG WITH THEIR CORRESPONDING NAICS
CODES
10720104
10720122
10720126
10720135
Storage and other non-pressure tanks
Gas cylinders
Metal tanks, complete at factory, standard line pressure
Metal tanks and vessels, custom fabricated at factory, field erected
107201351 Ferrous metal pressure tanks and vessels (more than 24-in. diameter and 5-ft3 capacity)
107201352 All other metal tanks and vessels, custom fabricated at the factory
10720152
Metal tanks and vessels, custom fabricated and field erected
Comparison of Storage Tank Aggregate and Detailed PPI Data
Dates (1996-2023)
- WDU10720104 - WDU10720135 - WPU107201
FIGURE 1. The PPI data series that aggregates
different categories of storage tanks has historically
followed a similar general trajectory to the
individual PPI series IDs that comprise it
tiple categories have been assigned
an identifying code, according to the
North American Industry Classification
System (NAICS), administered by
the U.S. Census Bureau (Washington,
D.C.; www.census.gov/naics).
The NAICS code categories are used
by the BLS, and correspond to the
series IDs for each of PPIs published
by BLS. The codes are arranged first
by broader categories of equipment,
then subdivided by increasing levels
of detail for different types of equipment
within the broader categories.
In the case of storage tanks and
vessels, a broad category for " metal
tanks, " given the PPI Series ID code
WPU107201, is made up of seven
more detailed indexes that comprise
the broad category (Table 1). AcCHEMICAL
ENGINEERING WWW.CHEMENGONLINE.COM
JULY 2023
INFORMATION ON THE CEPCI
The CE Plant Cost Index is actually a composite
that consists of four subindices. The
headings of these components are the following:
Equipment; Construction Labor;
Buildings; and Engineering and Supervision
(see Table 2). The Equipment subindex
is itself a composite of seven other
indices, each focusing on a particular category
of process equipment. The component
indexes are compiled, and weighting
factors are applied to make up the Equipment
subindex. The three other subindexes
are compiled independently from
appropriate inputs. Information on these
four indexes has been reported running
back to 1947. After weighting and normalizing
the values, the four sub-indexes
are combined to constitute the CEPCI.
For each year in the past, an annual value
for the CEPCI is calculated based on the
arithmetic mean of 12 monthly values for
a given year. CEPCI data from previous
years can be found at the following URL:
www.chemengonline.com/pci.
❏
43
PPI data values

http://www.bls.gov http://www.census.gov/naics http://www.chemengonline.com/pci http://WWW.CHEMENGONLINE.COM

Chemical Engineering July 2023

Table of Contents for the Digital Edition of Chemical Engineering July 2023