Ratio of Labor Cost to Material Cost

[Tyler Small]

I know overall costs vary widely depending on where you are in the country, but it seems like ratios would stay pretty much the same. I may be incorrect about that, so if I am, please let me know.

I just finished a renovation with the company I work for and we provided the majority of the labor for the project and bought all of that materials ourselves. The project budget ended up being 30% Sub Costs, 31% Materials, and 39% Labor. I subtracted soft costs, etc. for this analysis. The sub costs don't really play a role, but I'm interested to know what the members here think of my labor to materials ratio. It cost us $1.28 in labor for every $1.00 in materials. I think the labor was pretty high, but I don't know for sure. If there is a conclusion to be drawn, I would appreciate assistance from the membership.

Thanks,
Tyler

[Steven Straughn]

It doesn't seem to me that there is any real correlation, or any benefit in trying to find one. Why would it cost more to install a $150 faucet than a $50 faucet? Or to install a $200 prefab slab vs. a $500 slab? As a flooring pro, I leave myself room to charge more for installing a cheap floor because they are usually harder to install, but generally my rates don't change based on the cost of the material. Also, consider that I had a client pay $5.50/sf for a floor that I could have sourced for him at $3.25/sf. Not that anyone around here would overpay like that.

In the end, your ratio might just be an indication of the quality of your finished products.