NEWS RELEASE                                                                                                         MAY 2012

Air and Water Product Prices Are Up 9 Percent Since 2010

Prices of equipment, services and consumables utilized in air and water pollution control have risen 9 percent in the two years starting with the spring of 2010.  This is a world average and varies considerably in individual countries.

Typically, market forecasts (McIlvaine is no exception) are based on the value of the dollar as of a certain year.  If the user of the report wants to determine the revenue forecast in actual dollars for a current or future year, he must add in an inflation factor.  McIlvaine uses a base year of 2010.  On a world basis, 2011 revenues have to be multiplied by 1.05 and projected 2012 revenues have to be multiplied by 1.05 x 1.04 or 1.09 to convert revenue forecasts to current dollars.

The prices for environmental equipment and services are up about two percentage points above general inflation which has been 7 percent worldwide in the two year period.

Inflation rates vary considerably from country to country.  They range from 10 percent in Turkey to 1 percent in Sweden.

In general, the price hikes are large and do not take place yearly but in reaction to changes in material and energy costs.  Here are some examples:

Another requirement is to adjust revenue figures to the pricing in individual countries. Where the market is set by import prices then this is not a requirement. However, when the prices are set by in–country competition, it is necessary to adjust market forecasts to reflect the local pricing.  This can be done on an approximate basis by comparing nominal GDP to purchasing power parity GDP.

China has built its manufacturing base to build higher technology products. As a result, local competition sets the pricing for more products than in India which must still import much of the high technology products.  Chinese local pricing has risen substantially in recent years and is now at 65 percent of the U.S. level. This is in contrast to India where prices of locally manufactured goods are only 37 percent of the U.S. level.

Details on price increases, inflation and purchasing parity are included in all the McIlvaine air, water and energy market reports.  For more information on these reports, click on: www.mcilvainecompany.com