Just as with any other manufactured products the economics of pencil manufacturing are driven by a number of factors.

These cost drivers include:

- cost of raw materials (wood, graphitei, clay, brass, lacquer, etc.)
- cost of parts or other finished components used to assemble the pencil
- cost of transportation and handling of various materials used and of the finished product to the factory
- cost of labor and benefits for the factory workers employees
- cost of energy
- cost of supplies used to maintain eq