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MACHINERY & EQUIPMENT COSTS' INFLATION RATE POSTS LARGEST PERCENTAGE DROP IN NINE YEARS; INDUSTRIAL BUILDING COSTS' INFLATION RATE RISES

 MACHINERY & EQUIPMENT COSTS' INFLATION RATE POSTS LARGEST PERCENTAGE
 DROP IN NINE YEARS; INDUSTRIAL BUILDING COSTS' INFLATION RATE RISES
 LONG GROVE, Ill., Jan. 23 /PRNewswire/ -- The recession continued to affect industrial machinery and equipment costs during 1991's second half, as their inflation rate took its largest percentage drop in nine years. That inflation rate also hit its lowest point in five years, according to the results of a Kemper National Insurance Companies survey released today.
 The rate of inflation for machinery and equipment fell 40 percent during the last six months of 1991, to 0.98 percent from 1.63 percent during the first half of 1991. This is the lowest six-month inflation rate since the second half of 1986 and the biggest percentage drop in this inflation rate since the second half of 1982.
 Also during the second half of 1991, the rate of inflation for industrial building costs rebounded, increasing to 1.21 percent from 0.77 percent during 1991's first six months.
 One of the world's major industrial insurers, Kemper National develops these cost trends through biannual surveys of more than 300 North American manufacturers. This type of information is useful to companies when determining the present worth of their facilities for insurance purposes, according to Richard C. Lunt, Kemper National's property valuation and appraisal manager.
 International Trends
 Also included in the survey are industrial cost trends for Australia, Belgium, France, Japan, Singapore, the United Kingdom and the Federal Republic of Germany. Compared to the United States, the industrial building inflation rates for the latest six-month period were higher in France and the United Kingdom and lower in the other countries. Inflation rates for machinery and equipment were lower in Australia and Singapore and higher in the remaining countries surveyed.
 Kemper National's cost trends are calculated by use of a weighted index. They are corrected for productivity and include an installation factor. The cost trends indicate overall percentage increases in the cost of buildings erected and machinery fully installed for various types of plants.
 Single copies of the survey are available for $25 by writing to Richard Lunt, NID, D-7, Kemper National Insurance Companies, Long Grove, Ill., 60049.
 A chart with complete current and historical survey results follows. All percentage changes are increases.
 Survey Results
 (Figures in percents)
 Machinery & Equipment
 6 Mo. 6 Mo. 6 Mo. 6 Mo. 6 Mo. 6 Mo.
 to to to to to to
 1/92 7/91 1/91 7/90 1/90 7/89
 Cement & mining +1.08 +1.17 +1.18 +2.02 +2.23 +2.05
 Food industry +1.78 +2.15 + .72 +1.50 +2.40 +1.68
 Forging + .76 + .91 +2.10 +1.93 +2.73 +2.64
 Foundry +1.20 +1.71 +1.86 +2.37 +1.36 +1.36
 Hospital +1.30 +1.16 +1.86 +2.16 +2.60 +2.79
 Machine shop +1.80 +1.66 +2.43 +2.65 +2.86 +2.46
 Office + .26 +1.73 +1.77 +2.27 +3.20 + .81
 Paper mfg. + .96 +1.30 +3.11 +3.71 +3.60 +4.20
 Plastics + .14 +1.59 +2.74 + .79 +1.65 +1.29
 Printing + .83 +1.83 +3.27 +3.20 +1.00 +2.35
 Sheet mtl. fab. + .90 +1.70 +2.10 +2.41 +2.35 +2.17
 Textile + .92 +1.20 +2.67 +1.76 +2.73 +2.61
 Rubber + .20 +2.49 +2.24 +1.77 +2.30 +3.07
 Woodworking +1.62 +1.77 +2.76 +2.34 +1.04 +1.94
 Average + .98 +1.63 +2.20 +2.21 +2.29 +2.27
 Industrial Buildings
 6 Mo. 6 Mo. 6 Mo. 6 Mo. 6 Mo. 6 Mo.
 to to to to to to
 1/92 7/91 1/91 7/90 1/90 7/89
 Eastern +2.32 + .95 +2.07 +1.33 +1.53 +1.76
 Central + .96 + .60 +1.34 +1.55 +1.38 + .66
 Southern + .49 + .70 + .86 +1.40 +1.18 + .82
 Western +1.05 + .85 +1.48 +1.82 +1.67 + .49
 Average +1.21 + .77 +1.44 +1.53 +1.44 + .93
 -0- 1/23/92
 /CONTACT: Patrick Gould of Kemper National, 708-540-3422/ CO: ST: Illinois IN: MAC SU: ECO


CK -- NY053 -- 2797 01/23/92 12:16 EST
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Date:Jan 23, 1992
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