APPENDIX 6A. DETAILED DATA FOR EQUIPMENT PRICE MARKUPS
 

TABLE OF CONTENTS
 

6A.1 INTRODUCTION ........................................................................................................... 6A-1
 

6A.2 DETAILED WHOLESALER COST DATA .................................................................. 6A-1
 

6A.3 DETAILED MECHANICAL CONTRACTOR DATA.................................................. 6A-2
 

6A.4 DETAILED GENERAL CONTRACTOR COST DATA............................................... 6A-3
 

6A.5 ESTIMATION OF WHOLESALER AND CONTRACTOR MARK-UP STANDARD 

DEVIATIONS .............................................................................................................. 6A-4
 

LIST OF TABLES 

Table 6A.2.1 Disaggregated Costs and Expenses for Wholesalers ..................................... 6A-1 

Table 6A.3.1 Mechanical Contractor Expenses and Markups Used To Scale the 

Incremental Markups ..................................................................................... 6A-3
 

Table 6A.4.1 General Contractor Expenses and Markups................................................... 6A-4
 

Table 6A.5.1 Wholesaler Incremental Markup Standard Deviation.................................... 6A-5
 

Table 6A.5.2 Mechanical Contractor Baseline Mark-ups by State, 2002 ........................... 6A-5
 

Table 6A.5.3 Residential General Contractor Baseline Mark-ups by State, 2002 .............. 6A-7
 

Table 6A.5.4 Commercial General Contractor Baseline Mark-ups by State, 2002............. 6A-8
 

6A-i 
 

APPENDIX 6A. DETAILED DATA FOR EQUIPMENT PRICE MARKUPS 

6A.1 INTRODUCTION 

This appendix provides further details on information presented in Chapter 6, markups 

for equipment price determination. 

6A.2 DETAILED WHOLESALER COST DATA 

Based on data provided in the 2008 Profit Report (2007 Data) of the Heating Airconditioning & Refrigeration Distributors International (HARDI), Table 6.4.1 of Chapter 6, 

section 6.4, Estimation of Wholesale Mark-ups shows wholesaler revenues and costs in 

aggregated form. Table 6A.2.1 below provides the complete breakdown of costs and expenses as 

provided in the 2008 Profit Report (2007 Data). The column labeled “Scaling” in Table 6A.2.1 

indicates which expenses the U.S. Department of Energy (DOE) assumed to scale with only the 

baseline markup and which it scaled with both the baseline and incremental markups. As 

described in Chapter 6, section 6.4, only those expenses that scale with baseline and incremental 

costs are marked-up when there is an incremental change in equipment costs. 

Table 6A.2.1 Disaggregated Costs and Expenses for Wholesalers 

Item 

Percent of Revenue 

% Scaling 

Cost of Goods Sold 73.0 

Gross Margin 27.0 

Payroll Expenses 15.6 Baseline 

Executive Salaries & Bonuses 1.9 

Branch Manager Salaries and Commissions 1.3 

Sales Executive Salaries & Commissions 0.5 

Outside Sales Salaries & Commissions 2.3 

Inside/Counter Sales/Wages 2.6 

Purchasing Salaries/Wages 0.4 

Credit Salaries/Wages 0.2 

IT Salaries/Wages 0.2 

Warehouse Salaries/Wages 1.7 

Delivery Salaries/Wages 0.7 

All Other Salaries/Wages & Bonuses 1.2 

Payroll Taxes 1.1 

Group Insurance 1.1 

Benefit Plans 0.4 

Occupancy Expenses 3.1 Baseline 

Utilities: Heat, Light, Power, Water 0.4 

Telephone 0.3 

Building Repairs & Maintenance 0.2 

Rent or Ownership in Real Estate 2.2 

6A-1 
 

 

Table 6A.2.1 (contd) 

Item 

Percent of Revenue 

% Scaling 

Other Operating Expenses 5.2 Baseline & Incremental 

Advertising & Promotion 0.5 

Insurance (business liability & casualty) 0.2 

Depreciation 0.4 

Vehicle Expenses 1.1 

Personal Property Taxes/Licenses 0.1 

Bad Debt Losses 0.3 

All Other Operating Expenses 2.6 

Total Operating Expenses 23.9 

Operating Profit 3.1 Baseline & Incremental 

Other Income 0.5 

Interest Expense 0.9 

Other Non-operating Expenses 0.0 

Profit Before Taxes 2.7 

Source: Heating, Air-conditioning & Refrigeration Distributors International. 2008. 2008 Profit Report (2007 Data).
 

Note: The wholesaler costs and expenses are percentage values as opposed to the per-dollar of sales revenue values shown in Table 6.4.1.
 

6A.3 DETAILED MECHANICAL CONTRACTOR DATA 

Based on data in the 2005 edition of Financial Analysis for the HVACR Contracting 

Industry, published by the Air Conditioning Contractors of America (ACCA), Tables 6.6.1, 

6.6.2, and 6.6.3 of Chapter 6, section 6.6, Estimation of Mechanical Contractor Markups provide 

mechanical contractor revenues and costs in aggregated form by ‘Cost of Goods Sold’ and 

‘Gross Margin.’ The Financial Analysis report did not provide a more disaggregate tabulation of 

these costs and expenses. As in section 6A.2, the gross margin category was assumed to scale 

only with the baseline markup. 

The more disaggregated breakdown of costs used to scale the incremental markup are 

shown in Table 6A.3.1 by both dollar value and percentage terms from the 2002 Census of 

Business. As the ACCA data were used to calculate the baseline markup, only the categories in 

the ‘Scaling’ column that scaled with both the baseline and incremental markups are marked. 

6A-2 
 

 

 

 

Table 6A.3.1 Mechanical Contractor Expenses and Markups Used To Scale the 

Incremental Markups 

Item 

Dollar Value 

$ 

Percentage 

% Scaling 

Total Cost of Equipment Sales 77,482,735 66.01 

Cost of materials, components, and supplies 37,813,136 32.21 

Payroll, construction workers 25,619,932 21.83 

Cost of construction work subcontracted out to others 12,462,622 10.62 

Cost of selected power, fuels, and lubricants 1,587,045 1.35 

Gross Margin 39,898,412 33.99 

Payroll Expenses 19,648,990 16.74 

Fringe benefits, all employees 9,326,660 7.95 

Payroll, other employees 10,322,330 8.79 

Occupancy Expenses 

Rental cost for machinery, equipment, and buildings + 

Purchased communication services 

2,926,539 2.49 

Other Operating Expenses 2,969,716 2.53 Baseline & 

Depreciation charges during year Incremental 1,666,352 1.42 

Cost of repairs to buildings and other structures + Cost of 

repairs to machinery and equipment 

1,303,364 1.11 

Net Profit Before Income Taxes 14,353,167 12.23 Baseline & 

Incremental 

Source: U.S. Census Bureau. 2002. Plumbing, Heating, and Air-Conditioning Contractors: 2002. Report EC02-231-238220, Table 4. Detailed
 

Statistics for Establishments: 2002. 

Note: Mechanical contractor costs and expenses are first presented as total dollar values and than converted to percentage values. This is in
 

contrast to the per dollar of sales revenue values shown in Table 6.5.4. 

6A.4 DETAILED GENERAL CONTRACTOR COST DATA 

Based on U.S. Department of Census data, Table 6.5.1 of Chapter 6, section 6.5, General 

Contractor Expenses and Markups shows general contractor revenues and costs in aggregated 

form. Table 6A.4.1 below shows the complete breakdown of costs and expenses provided by the 

U.S. Department of Census. The column labeled “Scaling” in Table 6A.4.1 indicates which 

expenses DOE assumed to scale with only the baseline markup and which scaled with both the 

baseline and incremental markups. As described in Chapter 6, section 6.6, only those expenses 

that scale with baseline and incremental costs are marked-up when there is an incremental 

change in equipment costs. 

The fact that the mechanical contractor relative standard deviation is 3.7 percent of the 

baseline markup implies that the standard deviation for the replacement and new markets, 

relative to their respective baseline markups, is also 3.7 percent. 

DOE also assumed that wholesaler, general contractor, and mechanical contractor 

incremental markups have the same relative standard deviation as wholesaler, general contractor, 

and mechanical contractor baseline markups. It used this assumption to calculate the standard 

deviation of wholesaler, general contractor, and mechanical contractor incremental markups. 

6A-3 
 

Table 6A.4.1 General Contractor Expenses and Markups 

Item 

Dollar Value 

$ 

Percentage 

% Scaling 

Total Cost of Equipment Sales 187,494,802 77.54 Baseline 

Cost of materials, components, and supplies 36,592,170 15.13 

Payroll, construction workers 16,516,884 6.83 

Cost of construction work subcontracted out to others 132,835,992 54.94 

Cost of selected power, fuels, and lubricants 1,549,756 0.64 

Gross Margin 54,310,758 22.46 

Payroll Expenses 19,517,206 8.07 Baseline 

Fringe benefits, all employees 6,823,998 2.82 

Payroll, other employees 12,693,208 5.25 

Occupancy Expenses 

Rental cost for machinery, equipment, and buildings + 

Purchased communication services 

3,737,333 1.55 Baseline 

Other Operating Expenses 2,747,096 1.14 Baseline & 

Depreciation charges during year 1,318,065 0.55 Incremental 

Cost of repairs to buildings and other structures + Cost of 

repairs to machinery and equipment 

1,429,031 0.59 

Net Profit Before Income Taxes 28,309,123 11.71 Baseline & 

Incremental 

Source: U.S. U.S. Census Bureau. 2002. Commercial and Institutional Building Construction: 2002. Report EC02-231-236220, 

Table 4. Detailed Statistics for Establishments: 2002. 

Note: General contractor costs and expenses are first presented as total dollar values and than converted to percentage values.
 

This is in contrast to the per dollar of sales revenue values shown in Table 6.6.1. 

6A.5 ESTIMATION OF WHOLESALER AND CONTRACTOR MARK-UP 

STANDARD DEVIATIONS 

DOE used U.S. Census survey data to estimate CAC/CHP equipment wholesaler, general 

contractor, and mechanical contractor markup distributions. In the case of wholesalers, survey 

data were available only in summary form at the national level (Table 6A.5.1). In the case of 

mechanical and general contractors, the survey data include state-level heating, ventilating, and 

air-conditioning (HVAC) total value of work, number of firms, cost of goods sold, cost of 

subcontract work, cost of materials, and construction payroll as shown in Table 6A.5.2, 

Table 6A.5.3, and Table 6A.5.4. 

DOE estimated the size of the baseline markup distribution from national statistics and 

the standard deviation of across-state markups. DOE defined the relative standard deviation as 

the standard deviation as a percent of the baseline markup. The wholesale markup standard 

deviation is 5.7 percent, derived from the average markup and published relative markup of 

7.7 percent, as shown in Table 6A.5.1. The mechanical contractor markup standard deviation is 

5.6 percent and the relative markup is 3.7 percent, derived from the average of state-level 

markups and their standard deviation in Table 6A.5.2. The residential general contractor markup 

standard deviation is 9.3 percent and the relative standard deviation is 6.8 percent, derived from 

the average of state-level markups and their standard deviation in Table 6A.5.3. The commercial 

general contractor markup standard deviation is 9.5 percent and the relative standard deviation is 

7.5 percent, derived from the average of state-level markups and their standard deviation in 

Table 6A.5.4. 

6A-4 
 

 

 

 

 

 

 

 

Table 6A.5.1 Wholesaler Incremental Markup Standard Deviation 

Number of Firms Sales 

($000) 

Cost of Goods Sold 

($000) 

Gross Margin 

($000) 

5180 17,715,524 

Cv for 4237 = 1.6% 

12,789,493 4,627,533 

Cv for 4237 = 7.7% 

Since Cv = σ / μ, σ = Cv / μ = 0.077 / 1.362 = 0.057 

Where: Cv = Coefficient of variation 

σ = Standard deviation 

μ = mean value 

Sources: U.S. Census Bureau. 2005. Sector 42: Wholesale Trade: Subject Series - Misc Subjects: Gross Margin and its Components for Merchant 

Wholesalers for the United States: 2002 @ http://factfinder.census.gov/servlet/IBQTable?_bm=y&-geo_id=&-_skip=0&-

ds_name=EC0242SXSB06&-_lang=en 

U.S. Census Bureau. 2005. Annual Report for Wholesale Trade: 2002-2003. Report BW(MSBO)/04-A. 

http://www.census.gov/svsd/www/msbo2003.pdf 

U.S. Bureau of Census. 2005. Table 4. Estimated Coefficients of Variation of Annual Sales, End-of-Year Inventories, Purchases, Gross Margins, 

and Gross Margin/Sales Ratios for Merchant Wholesalers, excluding Manufacturers' Sales Branches and Offices (MSBOs) @ 

http://www.census.gov/svsd/www/atstable4.txt 

Notes: The data are at the national level.
 

NAICS 4237 applies to Hrdwr, plumb & heat equip & supp merchant wholesalers and 42373 applies to Warm air heating & AC equip merchant
 

wholesalers.
 

Cv = coefficient of variation.
 

Table 6A.5.2 Mechanical Contractor Baseline Mark-ups by State, 2002 

State 

Number 

of Firms 

Value of 

Construction 

($000) 

Cost of 

Subcontract 

Work 

($000) 

Cost of 

Materials 

($000) 

Construction 

Payroll 

($000) 

Baseline 

Markup 

Relative 

Markup 

Alabama 1,425 1,490,919 151,240 547,075 308,967 1.480 0.981 

Alaska 229 384,009 68,230 110,136 73,456 1.525 1.010 

Arizona 1,510 1,958,430 141,885 776,733 420,945 1.462 0.969 

Arkansas 1,045 799,157 65,491 305,198 154,099 1.523 1.009 

California 7,272 12,346,970 1,172,183 4,018,408 2,701,227 1.565 1.037 

Colorado 2,015 2,354,183 235,012 821,432 547,419 1.468 0.973 

Connecticut 1,321 1,580,361 156,607 505,340 320,528 1.609 1.066 

Delaware 306 460,330 42,001 150,096 112,360 1.512 1.002 

District of 

Columbia 

22 117,971 D 29,263 21,379 1.490 0.987 

Florida 5,069 6,255,428 616,097 2,270,555 1,263,030 1.507 0.999 

Georgia 2,534 3,436,673 380,819 1,226,368 653,972 1.520 1.007 

Hawaii 280 358,921 36,053 129,870 65,305 1.552 1.029 

Idaho 594 546,349 47,466 211,341 133,160 1.394 0.924 

Illinois 3,848 6,112,025 605,868 1,770,254 1,504,166 1.575 1.044 

Indiana 1,867 2,964,787 418,904 869,816 753,388 1.452 0.962 

Iowa 1,066 1,189,684 133,934 428,842 265,529 1.436 0.952 

Kansas 966 1,225,986 155,011 431,331 264,876 1.440 0.954 

Kentucky 1,219 1,357,063 121,960 469,639 307,205 1.510 1.000 

Louisiana 1,469 1,439,726 174,283 497,169 291,819 1.495 0.990 

Maine 458 393,322 36,149 138,587 76,034 1.568 1.039 

Maryland 2,024 3,902,613 583,237 1,251,986 797,428 1.482 0.982 

Massachusetts 2,520 3,531,662 503,155 1,038,151 713,798 1.566 1.038 

Michigan 3,051 4,334,221 492,957 1,338,229 957,980 1.554 1.030 

Minnesota 1,635 2,860,054 280,556 958,849 599,935 1.555 1.030 

Mississippi 655 754,652 70,985 283,993 132,824 1.547 1.025 

6A-5 
 

 

 

Table 6A.5.2 (contd) 

State 

Number 

of Firms 

Value of 

Construction 

($000) 

Cost of 

Subcontract 

Work 

($000) 

Cost of 

Materials 

($000) 

Construction 

Payroll 

($000) 

Baseline 

Markup 

Relative 

Markup 

Missouri 1,816 2,538,706 276,621 849,770 581,090 1.487 0.985 

Montana 432 356,269 44,987 135,009 68,332 1.435 0.951 

Nebraska 683 819,918 90,582 321,124 177,052 1.393 0.923 

Nevada 498 1,093,329 78,259 350,851 236,089 1.644 1.089 

New Hampshire 531 535,046 52,209 179,259 123,215 1.509 1.000 

New Jersey 3,551 4,210,275 466,668 1,230,617 949,465 1.591 1.054 

New Mexico 599 543,713 51,116 191,757 104,423 1.566 1.037 

New York 5,750 7,561,952 949,038 2,335,220 1,595,864 1.550 1.027 

North Carolina 2,978 3,231,394 339,388 1,127,518 684,958 1.502 0.995 

North Dakota 272 291,850 34,971 105,405 66,002 1.414 0.937 

Ohio 3,514 4,611,590 502,061 1,470,907 1,037,116 1.532 1.015 

Oklahoma 1,158 906,621 77,207 341,921 185,111 1.500 0.994 

Oregon 1,031 1,440,390 132,523 506,559 332,135 1.483 0.983 

Pennsylvania 3,653 5,929,629 639,074 1,766,004 1,193,465 1.648 1.092 

Rhode Island 397 490,872 60,217 171,994 99,426 1.480 0.981 

South Carolina 1,472 1,395,359 111,394 518,386 327,238 1.458 0.966 

South Dakota 337 333,758 22,754 141,297 58,708 1.498 0.993 

Tennessee 1,370 2,292,875 201,748 846,426 459,475 1.521 1.008 

Texas 5,653 8,061,607 807,501 2,889,320 1,746,739 1.481 0.981 

Utah 892 1,010,317 113,775 353,958 202,682 1.507 0.999 

Vermont 282 208,056 19,987 77,251 43,158 1.482 0.982 

Virginia 2,547 3,036,417 254,085 1,074,309 700,273 1.497 0.992 

Washington 1,602 2,344,257 222,282 773,211 543,668 1.523 1.009 

West Virginia 416 296,407 19,109 99,089 71,401 1.563 1.036 

Wisconsin 1,839 2,578,014 193,399 941,806 617,852 1.471 0.974 

Wyoming 262 166,318 D 59,507 35,307 1.451 0.962 

Average Baseline Markup 

Standard Deviation 

Relative Standard Deviation 

1.509 1.000 

0.056 

0.037 

Sources: U.S. Bureau of the Census. American Factfinder. 2002 Economic Census. Sector 23: Construction: Geographic Area Series: General 

Statistics for Establishments by State: 2002. Accessed on March 25, 2009 at http://factfinder.census.gov/servlet/IBQTable?_bm=y&-

fds_name=EC0200A1&-_industry=23822&-NAICS2002sector=8699097&-ib_type=NAICS2002&-_lang=en&-geo_id=&-

NAICS2002=23822&-ds_name=EC0223A1&-NAICS2002subsector=8701562 and 

Bureau of the Census. American Factfinder. 2002 Economic Census. Sector 23: Construction: Industry Series: General Statistics for 

Establishments by State: 2002. Accessed March 25, 2009 at http://factfinder.census.gov/servlet/IBQTable?_bm=y&-fds_name=EC0200A1&-

_industry=238220&-NAICS2002sector=8699097&-ib_type=NAICS2002&-_lang=en&-geo_id=&-NAICS2002=238220&-

ds_name=EC0223I03&-NAICS2002subsector=8701562 

Notes: The Census Bureau withheld data for some states. 

Markups may vary across states for several reasons, including differences in firm size.
 

6A-6 
Table 6A.5.3 Residential General Contractor Baseline Mark-ups by State, 2002 

State 

Number of 

Firms, 

Residential 

Value of 

Residential 

Construction 

($000) 

Cost of 

Subcontract 

Work 

($000) 

Cost of 

Materials 

($000) 

Construction 

Payroll 

($000) 

Baseline 

Markup 

Relative 

Markup 

Alabama 2,156 2,352,156 879,887 913,466 121,743 1.228 0.896 

Alaska 593 555,693 180,602 182,651 45,102 1.361 0.993 

Arizona 2,927 8,944,590 4,077,531 1,520,550 340,851 1.506 1.099 

Arkansas 1,102 965,784 330,411 399,722 64,603 1.215 0.887 

California 17,492 35,599,566 14,223,394 6,517,163 2,185,454 1.553 1.133 

Colorado 4,294 8,969,090 3,654,221 2,207,474 368,475 1.440 1.051 

Connecticut 2,033 2,376,761 836,239 795,422 175,075 1.315 0.960 

Delaware 668 954,727 324,103 258,374 55,222 1.497 1.093 

District of 

Columbia 

134 D D D 24,484 1.479 1.080 

Florida 8,816 25,237,559 9,614,388 6,421,377 904,292 1.490 1.087 

Georgia 4,811 9,930,327 3,671,913 3,454,040 374,997 1.324 0.966 

Hawaii 566 1,450,660 686,288 267,088 102,698 1.374 1.003 

Idaho 1,348 219,332 573,558 537,916 73,854 1.399 1.021 

Illinois 7,651 11,426,833 4,762,202 2,800,886 681,895 1.386 1.011 

Indiana 3,831 5,017,140 1,806,047 1,840,614 267,379 1.282 0.936 

Iowa 2,059 1,233,036 417,991 440,248 99,750 1.287 0.939 

Kansas 1,844 1,844,443 699,013 615,232 106,010 1.299 0.948 

Kentucky 1,809 2,785,820 1,025,346 964,139 117,856 1.322 0.965 

Louisiana 1,547 1,316,948 475,260 428,061 92,753 1.322 0.965 

Maine 1,344 833,920 278,251 269,031 81,018 1.327 0.969 

Maryland 3,998 6,532,241 2,343,107 1,725,383 423,633 1.454 1.061 

Massachusetts 3,529 4,338,533 1,630,030 1,230,025 313,075 1.367 0.998 

Michigan 7,134 7,210,856 2,488,963 2,332,357 501,934 1.355 0.989 

Minnesota 4,190 6,581,446 2,664,325 1,815,880 315,586 1.372 1.002 

Mississippi 892 D D D 39,835 1.251 0.913 

Missouri 3,880 4,060,799 1,414,323 1,244,589 298,295 1.373 1.002 

Montana 1,217 857,782 323,303 283,334 69,987 1.268 0.925 

Nebraska 1,228 1,233,763 523,773 337,636 76,779 1.315 0.960 

Nevada 1,050 4,671,330 1,890,254 689,856 204,723 1.677 1.224 

New Hampshire 978 1,014,569 347,603 285,545 82,571 1.418 1.035 

New Jersey 5,833 7,773,252 2,556,482 2,284,090 502,713 1.455 1.062 

New Mexico 1,495 1,410,525 524,152 389,342 85,732 1.412 1.030 

New York 10,007 9,608,316 3,878,184 2,639,624 761,915 1.320 0.963 

North Carolina 6,576 9,462,181 3,339,029 3,114,139 443,960 1.372 1.001 

North Dakota 406 248,629 82,158 88,810 22,954 1.282 0.936 

Ohio 6,183 7,955,878 3,054,947 2,348,619 440,867 1.361 0.993 

Oklahoma 1,502 1,454,942 451,357 593,842 77,547 1.296 0.946 

Oregon 3,484 2,981,961 1,116,078 854,412 178,699 1.387 1.013 

Pennsylvania 6,828 8,045,755 2,744,933 2,665,008 509,054 1.359 0.992 

Rhode Island 805 643,949 235,284 245,728 46,251 1.221 0.891 

South Carolina 2,615 3,490,308 1,222,905 1,263,978 178,744 1.309 0.956 

South Dakota 750 497,463 D 200,146 33,480 1.295 0.945 

Tennessee 2,219 3,173,248 985,320 1,039,114 252,650 1.394 1.017 

Texas 6,735 21,459,933 7,977,898 6,337,942 791,977 1.420 1.037 

6A-7 
 

Table 6A.5.3 (contd) 

State 

Number of 

Firms, 

Residential 

Value of 

Residential 

Construction 

($000) 

Cost of 

Subcontract 

Work 

($000) 

Cost of 

Materials 

($000) 

Construction 

Payroll 

($000) 

Baseline 

Markup 

Relative 

Markup 

Utah 1,768 2,251,069 898,273 677,157 114,364 1.332 0.972 

Vermont 888 599,311 184,049 166,305 52,650 1.487 1.085 

Virginia 5,424 9,467,694 2,996,475 2,786,061 509,630 1.505 1.098 

Washington 7,005 6,513,741 2,204,286 1,814,321 426,371 1.465 1.069 

West Virginia 1,473 563,776 146,451 188,680 59,677 1.428 1.042 

Wisconsin 4,003 4,087,572 1,513,293 1,396,311 312,214 1.269 0.926 

Wyoming 532 371,662 133,759 113,250 49,138 1.255 0.916 

Average Baseline Markup 1.370 1.000 

Standard Deviation 0.093 

Relative Standard Deviation 0.068 

Sources: U.S. Bureau of the Census, American Factfinder. 2002 Economic Census. Sector 23: Construction: Geographic Area Series: General 

Statistics for Establishments by State: 2002. accessed 3-25-2009 at http://factfinder.census.gov/servlet/IBQTable?_bm=y&-

fds_name=EC0200A1&-_industry=23611&-NAICS2002sector=8699097&-ib_type=NAICS2002&-_lang=en&-geo_id=&-

NAICS2002=23611&-ds_name=EC0223A1&-NAICS2002subsector=8701533 and 

U.S. Bureau of the Census. American Factfinder. 2002 Economic Census. Sector 23: Construction: Industry Series: General Statistics for 

Establishments by State: 2002. Accessed March 25, 2009 at http://factfinder.census.gov/servlet/IBQTable?_bm=y&-fds_name=EC0200A1&-

_industry=236115&-_industry=236116&-_industry=236117&-_industry=236118&-_industry=236220&-NAICS2002sector=8699097&-

ib_type=NAICS2002&-_lang=en&-geo_id=&-NAICS2002=236115|236116|236117|236118|236220&-ds_name=EC0223I03&-

NAICS2002subsector=8701533 

Notes: The Census Bureau withheld data for some states. 

Markups may vary across states for several reasons, including differences in firm size
 

Table 6A.5.4 Commercial General Contractor Baseline Mark-ups by State, 2002 

State 

Number of 

Firms, 

Commercial 

Value of 

Commercial 

Construction 

($000) 

Cost of 

Subcontract 

Work 

($000) 

Cost of 

Materials 

($000) 

Construction 

Payroll 

($000) 

Baseline 

Markup 

Relative 

Markup 

Alabama 633 4,087,391 2,224,073 648,488 257,100 1.306 1.026 

Alaska 179 1,013,830 513,186 232,958 102,651 1.194 0.938 

Arizona 647 4,793,249 2,824,778 554,056 238,438 1.325 1.041 

Arkansas 339 1,764,890 891,847 361,034 121,985 1.284 1.008 

California 4,179 27,905,058 16,477,915 3,569,406 1,859,722 1.274 1.000 

Colorado 929 6,466,717 3,835,598 1,022,903 351,770 1.241 0.975 

Connecticut 365 2,958,160 1,697,294 440,540 248,136 1.240 0.974 

Delaware 122 633,739 325,254 98,580 85,416 1.244 0.977 

District of 

Columbia 

47 641,796 425,080 32,556 38,424 1.294 1.016 

Florida 1,900 11,708,047 6,593,086 1,727,883 556,589 1.319 1.036 

Georgia 1,335 10,267,854 5,885,254 1,879,470 551,798 1.235 0.969 

Hawaii 169 1,483,121 739,526 250,037 134,938 1.319 1.036 

Idaho 290 909,164 516,919 142,880 67,147 1.251 0.982 

Illinois 1,493 10,232,559 5,296,152 1,432,918 772,060 1.364 1.071 

Indiana 665 4,732,683 2,541,628 755,937 363,268 1.293 1.015 

Iowa 512 2,124,574 1,142,078 490,254 188,518 1.167 0.916 

Kansas 341 1,947,757 1,026,208 410,497 135,895 1.239 0.973 

Kentucky 527 2,199,782 1,182,207 383,228 184,386 1.257 0.987 

6A-8 
 

Table 6A.5.4 (contd) 

State 

Number of 

Firms, 

Commercial 

Value of 

Commercial 

Construction 

($000) 

Cost of 

Subcontract 

Work

 ($000) 

Cost of 

Materials 

($000) 

Construction 

Payroll 

($000) 

Baseline 

Markup 

Relative 

Markup 

Louisiana 513 2,909,041 1,410,150 703,189 247,488 1.232 0.968 

Maine 185 584,457 330,848 91,490 39,088 1.267 0.995 

Maryland 872 6,675,194 3,829,059 766,415 422,357 1.330 1.045 

Massachusetts 786 8,075,207 5,233,003 1,114,320 430,337 1.191 0.936 

Michigan 1,237 6,501,437 3,372,219 1,009,192 436,199 1.350 1.060 

Minnesota 748 6,161,105 3,771,957 1,030,060 428,143 1.178 0.925 

Mississippi 297 2,017,236 925,348 438,336 216,914 1.276 1.002 

Missouri 834 7,193,405 4,625,554 1,062,202 519,994 1.159 0.910 

Montana 139 456,228 216,656 100,544 46,776 1.253 0.984 

Nebraska 285 1,361,395 737,300 257,308 106,558 1.236 0.971 

Nevada 350 2,488,460 1,352,898 500,324 185,380 1.221 0.959 

New Hampshire 153 1,123,795 709,159 168,953 75,195 1.179 0.926 

New Jersey 1,191 7,134,900 3,823,338 959,859 549,231 1.338 1.051 

New Mexico 265 1,111,735 585,306 189,063 100,363 1.271 0.998 

New York 2,147 16,092,933 7,732,253 2,214,809 1,103,423 1.456 1.144 

North Carolina 1,053 6,123,409 3,212,008 1,143,321 387,044 1.291 1.014 

North Dakota 164 346,507 151,554 94,777 39,360 1.213 0.952 

Ohio 1,354 6,956,588 3,743,681 1,226,315 600,282 1.249 0.981 

Oklahoma 440 2,242,093 1,261,310 438,198 124,791 1.229 0.965 

Oregon 614 2,998,924 1,762,863 577,844 338,286 1.119 0.879 

Pennsylvania 1,419 10,114,293 5,579,230 1,612,363 697,391 1.282 1.007 

Rhode Island 138 1,205,052 534,577 80,447 62,293 1.779 1.397 

South Carolina 525 2,298,379 1,049,437 521,385 197,114 1.300 1.021 

South Dakota 117 540,082 258,352 140,454 51,216 1.200 0.942 

Tennessee 763 5,003,780 2,657,587 745,164 325,486 1.342 1.054 

Texas 2,890 17,578,086 8,870,626 2,817,907 961,374 1.390 1.091 

Utah 432 2,742,884 1,428,086 589,679 162,060 1.258 0.988 

Vermont 100 376,473 199,521 56,407 41,172 1.267 0.995 

Virginia 851 6,287,509 3,781,530 928,059 402,428 1.230 0.966 

Washington 929 5,086,570 2,947,223 836,605 449,325 1.202 0.944 

West Virginia 200 419,620 155,537 110,001 58,024 1.297 1.018 

Wisconsin 595 4,867,473 2,460,336 1,030,059 479,144 1.226 0.963 

Wyoming 133 291,926 129,865 69,637 26,669 1.291 1.014 

Average Baseline Markup 

Standard Deviation 

Relative Standard Deviation 

1.273 1.000 

0.095 

0.075 

Sources: U.S. Bureau of the Census, American Factfinder. 2002 Economic Census. Sector 23: Construction: Geographic Area Series: General 

Statistics for Establishments by State: 2002. accessed 3-25-2009 at http://factfinder.census.gov/servlet/IBQTable?_bm=y&-

fds_name=EC0200A1&-_industry=23611&-NAICS2002sector=8699097&-ib_type=NAICS2002&-_lang=en&-geo_id=&-

NAICS2002=23611&-ds_name=EC0223A1&-NAICS2002subsector=8701533
 

Notes: The Census Bureau withheld data for some states. 

Markups may vary across states for several reasons, including differences in firm size
 

6A-9 
DOE assumed that new construction and replacement market mechanical contractor 

markups have the same relative standard deviation as that developed from the baseline markups 

for all contractors. The fact that the mechanical contractor relative standard deviation is 

3.7 percent of the baseline markup implies that the standard deviation for the replacement and 

new markets, relative to their respective baseline markups, is also 3.7 percent. 

DOE also assumed that wholesaler, general contractor, and mechanical contractor 

incremental markups have the same relative standard deviation as wholesaler, general contractor, 

and mechanical contractor baseline markups. It used this assumption to calculate the standard 

deviation of wholesaler, general contractor, and mechanical contractor incremental markups. 

The relative standard deviations for mechanical and general contractors are not used 

directly to estimate markups as for wholesale trade. The markups in construction vary 

systematically relative to their mean by state, so the state relative markups are applied 

individually to average markups by class of construction in each state. 

6A-10