What is the breakdown of a typical rocket- say, a Delta IV? From what I've heard 99% of the cost is engineering labor but I haven't seen any source for that. I just need the manufacturing cost of the rocket, not launching, operating, etc.

What is the typical cost percentage going to:

Engineering labor

General/Administrative/profit

Indirect labor

Direct labor

Capital

Materials

Balance of system

If that's too much to ask, a simple guess of the percent cost going to materials/labor/capital would be helpful.

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    I suspect there is no such thing as a "typical" rocket in the sense you are implying. That said, because so few get built, rockets are typically manufactured in very labor-intensive ways (it just doesn't make much sense to automate much of the production), so it makes sense that labor cost would be a comparatively large fraction of the total cost. – a CVn Aug 14 '16 at 20:04
  • Given that the rockets themselves seem to be "disposable" in the sense that most of the time they're allowed to burn up on re-entry, it seems to me the largest single cost of a rocket is the fuel it burns. – Daniel Anderson Aug 15 '16 at 1:40
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    Absolutely not. Fuel cost is a rounding error compared to design and manufacturing costs. – Organic Marble Aug 15 '16 at 2:24
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    @DanielAnderson What Organic Marble said (even though I still don't have any specific numbers). Just because something "burns" or is "allowed to burn up" doesn't make it "fuel". – a CVn Aug 15 '16 at 6:29

SpaceX does little but launch things in to space, plus R&D for future missions. The current employee count at SpaceX is over 4000. Payscale estimates the salaries, to which we can effectively double to estimate the actual cost per employee, including benefits, places to work, etc. From that, I'm going to guess the average salary is about \$90K/employee. That means the rough cost of an employee is more like \$180K. Thus, the costs associated with labor are about \$720 million per year.

The raw goods are primarily aerospace grade aluminum. The cost is roughly \$1/pound. Much of it is also carbon composite, and more expensive items, so let's double that. The inert mass is roughly 30,000 kg. That means the raw cost is about \$120,000. There will be more when you consider there are some specially ordered components.

Fuel costs per launch are estimated at about \$60,000 per launch. There are usually 3 fillings of the fuel per mission, so let's triple that.

Okay, let's assume there are 18 launches per year, averaging \$70 million per launch (Including government launches which are more expensive). That gives an income of about \$1.26 billion per year. The raw goods cost are \$300,000 per launch, or \$5.4 million.

In SpaceX's defense, most of the difference, which I suspect is real, is either put in to capital costs, paying for more machines and buildings, future R&D work, Dragon (Which wasn't accounted for), or making money from the years that SpaceX didn't have as many launches in a year.

Bottom line, like most expensive product, most of the cost is in labor. The numbers here are guesses, and the number of launches is higher than expected.

Cost of a single launch

From Launch vehicles: an economic perspective:

The 1994 study of DOD launch vehicles (mainly Titan and Atlas) showed the breakdown of the various components of a launch. The vehicle was only about half of the total cost. The remainder was divided among operations (30%), payload integration (5%) and “other” government costs (15%).

Production cost

Ariane 5

Production cost: 114m (not launch cost, based on Arianespace's purchase of 35 rockets for 4bn) (in €, 2009)

Boosters: ~25m
Vulcain: ~15m
Upper stage: ~20m
EPC (first stage incl. Vulcain), VEB (control system on top of second stage), fairing: 69m

Production cost is subject to a cost curve: if the first rocket to be built costs 100%, the second will be (roughly) 90% of that, the third will be 90% of the second. The curve will look like this:
Cost curve

So the 200th rocket costs 50% of the first one to build. In rocket terms, that's a huge production run.

To produce a rocket, you need expensive tooling:

  • A building large enough to maneuver the stage in.
  • E.g. to weld the first stage, you need a welding fixture large enough to hold the entire stage, and accurate to within millimeters, if not less.
  • if you use carbon composites, you need an autoclave (vacuum oven) large enough for the largest piece you make. Some rockets have the outer skin of entire stages built as a single piece of carbon composite.
  • milling and welding equipment for exotic materials, like the high-temperature alloys used in rocket engines.
  • inspection equipment (again, huge systems to inspect an entire first stage tank).

All this tooling has to be paid off over a small (in terms of mass production) number of rockets built. The tooling can cost on the order of billions.

Because of the small production run, you can't automate everything. So there's lots of highly-qualified labor involved.

The cost of the materials is only a small part of the production cost.

Development budget

Again, Ariane 5, from 'Europäische Tragerraketen, band 2', Bernd Leitenberger:

Studies and tests 125
solid boosters 355
H120 first stage 270
HM60 (Vulcain) engine and test stands 738
other elements of the first stage and boosters 95
upper stage and VEB 200
ground support in Europe 80
Buildings and other structures in Kourou (launch pad) 450
Test flights 185
Total 2498
ESA and CNES management 102

This was the budget in million €, as set in 1985. Final cost was on the order of 120% of this budget.

There are a lot of good answers here. Let's look also at why rockets cost so much.

Google says the average home is about \$250k to buy a home, about a third of which is labor, \$80k. You can see a typical house cost breakdown here. It also weighs about 120k pounds. So labor costs are roughly \$1/lb.

However, construction workers are paid close to minimum wage, while as Pearson cited rocket manufacturing employees make about ten times more. So that's \$10/lb. Lets double that to \$20/lb assuming a rocket is more complex than a house. As Hobbes cited, about half of the cost is R&D. So let's double to \$40/lb. Legal and other business costs might get us to \$60/lb, assuming again, from the housing example, that overhead is a third of the cost.

You can see here that SpaceX will potentially have a 40% profit margin. So in all the cost of a rocket is about \$100/lb.

However, a rocket is typically around \$1,000/lb of dry mass, with the fuel making up another 90% of the weight. So there must be waste, bureacracy, testing, or something making up the rest. Based on this example from firearms, products can be marked up sevenfold after passing through layer after layer of middlemen. So something similar to this may be happening with rocketry.

If not, then there must be significant testing expense. If we assume, per the comments and this link, that a Falcon 9 costs \$200k to fuel, that means 300 full launch tests can be done for each rocket to bring the cost close to what it sells for, \$60MM. If labor is the main testing cost, then with \$200k cost per employee it requires 300 person-years of testing. Assuming 1 million parts, typical of large aircraft, each employee-year involves testing one part per work hour.

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    Actually what that article says is that if SpaceX got 'reusability down to a science' its profitability could be as much as 40%. It certainly isn't 40% right now. Construction workers on average make about $35,000, and the median salary in the U.S. is $30,000, so they also are doing beter than you suggest. – kim holder Sep 23 '16 at 14:20
  • A large percentage of construction workers aren't even legally acknowledged to have entered the us, let alone post salary data on the internet. – D J Sims Sep 23 '16 at 16:04
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    Most of the weight of a house is construction material that has to be handled and/or modified. A rocket, on the other hand is mostly fuel. The cost of the fuel is negligible (a Falcon 9 costs $60M to build and $200k to fuel). If you want to compare cost/lb, you need to use the unfueled weight. – Hobbes Sep 23 '16 at 18:37
  • D'oh. I'm an idiot. I'll fix it. – D J Sims Sep 23 '16 at 19:04

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