Methodolgy of ENRs cost indexes, 03/26/12 issue
In the original CCI, the components were weighted at 38% for labor, 38% for steel, 17% for lumber and 7% for portland cement. The shifting tide of inflation changed the weight of the CCI components to 81% for labor, 13% for steel, 5% for lumber and 1% for cement. This shift was less dramatic for the BCI, which is now 66% for labor, 23% for steel, 9% for lumber and 2% for cement.
Neither index is adjusted for productivity, managerial efficiency, contractor overhead and profit, or other, less tangible cost factors. However, the indexes can be used to get a fix on these factors.
When productivity is low, the selling price will be relatively higher than the ENR index. At the other extreme, when competition is sharp—such as during a recession—the selling price of finished construction will generally fall below ENR's indexes.
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