Total Value of Shipments

Includes the received or receivable net selling values, “Free on Board” (FOB) plant (exclusive of freight and taxes), of all products shipped, both primary and secondary, as well as all miscellaneous receipts, such as receipts for contract work performed for others, installation and repair, sales of scrap, and sales of products bought and sold without further processing. Included are all items made by or for the establishments from material owned by it, whether sold, transferred to other plants of the same company, or shipped on consignment. The net selling value of products made in one plant on a contract basis from materials owned by another was reported by the plant providing the materials.

In the case of multiunit companies, the manufacturer was requested to report the value of products transferred to other establishments of the same company at full economic or commercial value, including not only the direct cost of production but also a reasonable proportion of “all other costs” (including company overhead) and profit.

In addition to the value for NAICS defined products, aggregates of the following categories of miscellaneous receipts are reported as part of a total establishment's value of product shipments:

  1. Reported contract work — receipts for work or services that a plant performed for others on their materials.
  2. Value of resales — sales of products bought and sold without further manufacture, processing, or assembly.
  3. Other miscellaneous receipts — includes repair work, installation, sales of scrap, etc.

Industry primary product value of shipments represents one of three components of value of shipments. These components are:

  1. Primary product value of shipments.
  2. Secondary product value of shipments.
  3. Total miscellaneous receipts.

Primary product shipments is used in the calculations of industry specialization ratio and industry coverage ratio.

Duplication in cost of materials and value of shipment

The aggregate of the cost of materials and value of shipments figures for industry groups and for all manufacturing industries includes large amounts of duplication, since the products of some industries are used as materials by others. This duplication results, in part, from the addition of related industries representing successive stages in the production of a finished manufactured product. Examples are the addition of flour mills to bakeries in the food group and the addition of pulp mills to paper mills in the paper and allied products group of industries.

Estimates of the overall extent of this duplication indicate that the value of manufactured products exclusive of such duplication (the value of finished manufactures) tends to approximate two-thirds of the total value of products reported in the annual survey.

Duplication of products within individual industries is significant within a number of industry groups, e.g., machinery and transportation industries. These industries frequently include complete machinery and their parts. In this case, the parts made for original equipment are materials consumed for assembly plants in the same industry.

Even when no significant amount of duplication is involved, value of shipments figures are deficient as measures of the relative economic importance of individual manufacturing industries or geographic areas because of the wide variation in ratio of materials, labor, and other processing costs of value of shipments, both among industries and within the same industry.

Before 1962, cost of materials and value of shipments were not published for some industries that included considerable duplication. Since then, these data have been published for all industries at the U.S. level and beginning in 1964, for all geographic levels.

Specialization and coverage ratio

An establishment is classified in a particular industry, if its shipments of primary products of that industry exceed in value its shipments of the products of any other single industry.

An establishment's shipments include those products assigned to an industry (primary products), those considered primary to other industries (secondary products), and receipts for miscellaneous activities (merchandising, contract work, resales, etc.).

Specialization and coverage ratio have been developed to measure the relationship of primary product shipments to the data on shipments for a particular industry.

Specialization ratio represents the ratio of primary product shipments to total product shipments (primary and secondary, excluding miscellaneous receipts) for the establishments classified in the industry.

Coverage ratio represents the ratio of primary products shipped by the establishments classified in the industry to the total shipments of such products that are shipped by all manufacturing establishments wherever classified.