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Industry Classif- ication Economic Census Table

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  • In this segment, we talk about how economic census data are organized.
  • 19 When we present data from the Economic Census, we classify the data by industry or kind-of-business, as illustrated by various types of motor vehicle dealers shown in the sample table.
  • The Government’s official system for classifying industries since the 1930's was the Standard Industrial Classification (or SIC) system. But the SIC system reflected an economy dominated by manufacturing, not the service economy into which we have evolved.
  • 19 The new North American Industry Classification System replaces the old Standard Industrial Classification (or SIC) system as of 1997. NAICS (which rhymes with "snakes") was defined as a joint project of the U.S., Canada and Mexico.
  • The most obvious differences between NAICS and SIC can be seen through New Industries New sectors And a new numbering system
  • NAICS had immediate benefits by identifying more than 350 new industries. This slide shows a handful of examples, like paging and telemarketing bureaus, that show how our economy has been changing in recent years.
  • At the same time, the way that industries are grouped into major economic sectors also changed. The SIC had 10 divisions, NAICS has 20.
  • NAICS also introduces a new numbering system. The new NAICS codes have 6 digits to replace the 4-digit SIC system. You can think of there being an extra digit at front of the code and an extra digit at the back of the code. For example, 3-digit NAICS subsectors represent roughly the same level of detail as did the 2-digit SIC level. Five digit codes represent NAICS industries–generally the level at which the three countries have corresponding classifications. We use the term U.S. Industry or US National Industry to refer to the six digit codes which in many cases go beyond what Canada and Mexico can provide.
  • Here is an actual example of the NAICS hierarchy. Within the Information Sector, 51, there is a 3-digit subsector for Broadcasting and Telecommunications, a 4-digit industry group for Telecommunications, and a 5-digit industry for Wireless Telecommunications. Only the U.S. further defines a 6-digit industry for paging, as distinct from the other category not shown–Cellular and other Wireless Telecommunications. (513322) Many users had hoped that going from a 4-digit SIC to a 6-digit NAICS code would mean orders of magnitude more detail. In fact, the number of classifications has gone up only about 15 percent. The greatest significance is that the NAICS identifies important new industries and important new groupings.
  • This slide shows how new sectors were broken out from the familiar divisions of the SIC. There are new sectors, like Utilities, and Transportation and Warehousing, that are broken out from old broader categories. Most dramatic are the new differentiations within service industries–6 new sectors
  • Yet that straightforward chart is really an oversimplification In fact, major chunks of service industries are also going into the new Accommodation and Food Services sector and the Real Estate and Rental and Leasing sector. And the new Information sector shown at the bottom of the screen is really getting its largest component–communications–from the old transportation, communications, and utilities division of the SIC.
  • Looking at 1997 retail sales as classified by SIC and NAICS, they don’t look all that much different. The inflow of wholesalers into retail trade appears to have offset much of the loss of restaurants to the new accommodations and foodservices sector. At least that is the way it looks in terms of sales.
  • But the picture is much different in employment. Restaurants tend to have lots of employees relative to their sales. The formerly wholesale establishments that came in to retail have much fewer. In terms of employment, retail trade under SIC and NAICS look quite different.
  • Before we go further, lets make sure we understand just what it is that is being classified by industry. A business establishment is a store, warehouse or factory operating at a specific physical location.
  • That is not the same thing as a company. A company consists of one or more establishments under common ownership or control. We require each company to give us separate data for each of their establishments, because frequently the different establishments do different things, and typically the different establishments are located in different geographic areas. So it is each establishment that gets a NAICS code, not the company as a whole. And it is the number of establishments, not the number of companies, that is featured in most census statistics.
  • The web site allows you to look at correspondence from both the NAICS and SIC perspective. In this consolidated presentation, one can click on the SIC code, and that brings up the SIC to NAICS correspondence table at the bottom. There we can see what happened to the other part of SIC 2771. The SIC was broken into 5 industries representing different printing technologies, and a sixth for publishing, that is, content development and marketing.
  • That is why there is a very important publication issued as part of the 1997 Economic Census entitled Bridge between NAICS and SIC. This gives national statistics defining for us just how much of each SIC category has gone to each NAICS–and vice versa–thereby defining comparability issues much more thoroughly than any other source. The answer to our question about Book Publishers is that the 1997 Economic Census didn’t even find any establishments primarily engaged in publishing technical manuals to the exclusion of all else, so movement of that category had no practical effect. The symbols here are a take-off on the bridge analogy. Those categories completely comparable between SIC and NAICS are shown with a full bridge with superstructure. Those not comparable are shown by a drawbridge wide open. Those almost comparable, like book publishers, are shown with a drawbridge nearly closed. We used that symbol if SIC-based data could get us within 3% of the NAICS sales or revenue.
  • Data prior to 1997 were published based on SIC. All data for 2002 and future years will be based on NAICS. Only for 1997 do we have some overlap between the two systems. Most 1997 data were published by NAICS, but selected national and state data were also published by SIC to facilitate the transition. NAICS gives us a better foundation for analysis of trends in the future. But in many respects there is a disconnect. Some series simply will not be able to bridge the gap between the two systems.
  • The old SIC system was updated every 10 to 15 years. That proved to be too infrequent. NAICS will be reviewed every 5 years. There are already changes implemented for 2002. Industries have been largely redefined within Construction and Wholesale Trade. Still, none of the boundaries between sectors were affected, so we have nothing like the upheaval users dealt with for 1997. Changes in retail trade and information are comparatively minor, with little or no impact on historical comparability
  • Transcript

    • 1. Industry Classif- ication
    • 2. Economic Census Table
      • Data classified by industry
    • 3. Standard Industrial Classification System
      • Developed in 1930's
      • Updated every 10-15 years
      • Dominated by manufacturing
      SIC
    • 4. NAICS
      • North
      • American
      • Industry
      • Classification
      • System
    • 5. NAICS is New
      • New industries
      • New sectors
      • New numbering system
    • 6. New Industries in NAICS - 97 Selected examples Fiber optic cable manufacturing Paging Warehouse clubs Food/health supplement stores Telemarketing bureaus HMO medical centers Diet and weight reducing centers
    • 7. NAICS Sectors 11 Agriculture, Forestry, Fishing, and Hunting 21 Mining 22 Utilities 23 Construction 31-33 Manufacturing 42 Wholesale Trade 44-45 Retail Trade 48-49 Transportation and Warehousing 51 Information 52 Finance and Insurance 53 Real Estate and Rental and Leasing
      • 54 Professional, Scientific and Technical
      • Services
      • 55 Management of Companies and Enterprises
      • 56 Administrative and Support
      • and Waste Management and
      • Remediation Services
      • 61 Educational Services
      • 62 Health Care and Social Assistance
      • Arts, Entertainment and
      • Recreation
      • Accommodation and
      • Food Services
      • Other Services (except
      • Public Administration)
      • 92 Public Administration
    • 8. New Numbering System
    • 9. New Numbering System Example Description Code Level Information 51 Sector Broadcasting & Telecommunications 513 Subsector Telecommunications 5133 Industry Group Wireless Telecommunications 51332 Industry Paging 513321 U.S. Industry
    • 10. New Sectors SIC Division NAICS Sector Transportation, Communications, and Utilities Utilities Transportation and Warehousing Finance, Insurance, Real Estate Finance and Insurance Real Estate and Rental and Leasing Retail Trade Retail Trade Accommodations and Food Services Service Industries Professional, Scientific, and Technical Svc Administrative & Support and Waste Management & Remediation Svcs Educational Services Health Care and Social Assistance Arts, Entertainment, and Recreation Information
    • 11. New Sectors SIC Division NAICS Sector Transportation, Communications, and Utilities Utilities Transportation and Warehousing Finance, Insurance, Real Estate Finance and Insurance Real Estate and Rental and Leasing Retail Trade Retail Trade Accommodations and Food Services Service Industries Professional, Scientific, and Technical Svc Administrative & Support and Waste Management & Remediation Svcs Educational Services Health Care and Social Assistance Arts, Entertainment, and Recreation Information
    • 12. Two Views of 1997 Retail Trade
    • 13. Two Views of 1997 Retail Trade
    • 14. Establishment A store, warehouse, factory, etc. at a single physical location
    • 15. Company One or more establishments under common ownership or control
    • 16. NAICS to SIC - SIC to NAICS
    • 17. Bridge between NAICS and SIC
    • 18. Assembling Time Series SIC 1987 1992 (1997) NAICS 1997 2002 2007
    • 19. Changes for NAICS 2002
      • Construction
      • Wholesale Trade
      • Retail Trade (E-tailing)
      • Information (Internet publishing)
      Implemented in 2002 Economic Census (published 2004-6)
    • 20. Transition to next segment North American Industry Classification System
    • 21.
      • http://www.census.gov/econ/census02/ (Economic Census)
      • http://www.census.gov/epcd/cbp/view/cbpview.html (County Business Patterns)
      • http://www.census.gov/population/www/socdemo/journey.html (Journey to Work)
      • http://www.georgiafacts.net/ (Georgia Facts)
      • http://www.census.gov/epcd/ec97brdg/ (conversion to NAICS)
    • 22.