Chemical plant cost indexes are dimensionless numbers employed to updating capital cost required to erect a chemical plant from a past date to a later time, following changes in the value of money due to inflation and deflation.
The weighting of such factors, which is defined by the realized degree of importance of each component in the specific index (or sub-index), aims to represent the costs variations typically found for chemical plants.
Differences between the actual equipment and labor prices and those predicted by the index tend to grow over the years, surpassing the typical error verified in budget-level estimates.
For example, while CE, M&S or IC Index are typically employed for chemical process industries, the ENR (Engineering News-Record) construction index is used for general industrial construction and takes in account the prices for fixed amounts of structural steel, cement, lumber and labor.
The majority of cost indexes demonstrate a time lag, due to data collection and its compilation for publishing.
As stated before, some indexes use information published by other organizations and a delay in data may be verified (like those provide by the BLS).
Likewise most of the data available for plant and equipment costs are mostly either in Hence the Index values cannot be used to get accurate results in other regions of the world.