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Overview and Progress Report

In February 1999, the statistical agencies of Canada, Mexico, and the United States launched a joint multi-phase initiative (Federal Register Notice, April 16, 1999) to develop a comprehensive demand-oriented product classification system to complement the new supply-oriented industry classification system introduced in 1997. The industry classification system is known as the North American Industry Classification System (NAICS); the product classification is known as the North American Product Classification System (NAPCS). The long-term objective of NAPCS is to develop a market-oriented, or demand-based, hierarchical classification system for products (goods and services) that (a) is not industry-of-origin based but can be linked to the NAICS industry structure, (b) is consistent across the three NAICS countries, and (c) promotes improvements in the identification and classification of service products across international classification systems, such as the Central Product Classification System of the United Nations. For more information, see discussion paper, "Overview of NAPCS Objectives, Guidance, and Implementation Strategy and Goals: A United States Perspective." In May 2003, the three countries agreed that the objectives and principles articulated in sections A through C of that paper define the purposes of NAPCS and the operational guidelines for creating it. Also see additional papers under the NAPCS Discussion Papers link and Frequently Asked Questions about NAPCS under the FAQs tab.

In planning the NAPCS initiative, the three countries began with a consensus on the proposition that improved product data for service industries is critical to improving vital economic measures related to measuring the growth of output, prices, productivity, and trade. In recognition of this fact, NAPCS work first focused on identifying and defining the products produced by industries in the 12 NAICS service sectors from Sector 48-49 through Sector 81. Embodying research conducted by 13 trilateral working groups, with extensive input from industry experts, this effort was implemented in three phases and was completed in 2009.

Phase I was launched in early 1999 to explore the feasibility of identifying and defining service products across the three countries, and it focused on the products produced by industries in four NAICS service sectors: Sector 51: Information, Sector 52: Finance and Insurance, Sector 54: Professional, Scientific, and Technical Services, and Sector 56: Administrative and Support and Waste Management and Remediation Services. Phase I generated 36 product lists that cover the final products produced by 117 US service industries. Products from 26 of these lists were incorporated into the 2002 Economic Census, and some were incorporated into the 2001 and subsequent Services Annual Surveys. Based on the success of Phase I, the three countries agreed that the NAPCS should continue and be expanded to cover the products of industries in all NAICS service sectors from Sector 48-49 through Sector 81 (excluding those in Sector 814, Private Households, and Subsector 525, Funds, Trusts, and Other Financial Vehicles).

Phase II, launched in July 2001, extended NAPCS to the industries in five additional NAICS service sectors: Sector 48-49: Transportation and Warehousing, Sector 61: Educational Services, Sector 62: Health Care and Social Assistance, Sector 71: Arts, Entertainment and Recreation, and Sector 72: Accommodation and Food Services. Phase III was launched in May 2004, and it extended NAPCS to industries not covered in the sectors addressed under Phases I and II and to industries in Sector 53: Real Estate and Rental and Leasing, Sector 55: Management of Companies and Enterprises, and Sector 81: Other Services (except Public Administration). Taken together, Phases II and III researched the final products produced by more than 250 US service industries.

The products developed under Phases I - III are assembled into 102 product lists that identify and define the significant products produced by about 370 US service industries. These lists include 98 that are at the trilateral level; three at the bilateral level (US and Mexico for NAICS 55-Management of Companies and Enterprises, NAICS 621210-Offices of Dentists, and NAICS 621610-Home Health Care Services); and one at the US-only level (for NAICS 621-2 (except 6212, 6, and 9)-Health Care Services of Physicians, Health Care Practitioners (except Dentists) and Hospitals). Product lines developed from all 102 lists were incorporated into product collection forms developed for the 2007 and 2012 Economic Censuses, and they are being incorporated incrementally into the Service Annual Survey (beginning in 2001).

The 102 product lists can be viewed in PDF file format (PDF files) using links on the NAPCS Main page;.

Plans for extending NAPCS to include the products of industries in NAICS Sector 11: Agriculture, Forestry, Fishing and Hunting; Sector 21: Mining; Sector 22: Utilities; Sector 23: Construction; Sector 31-33: Manufacturing; Sector 42: Wholesale Trade; and Sector 44-45: Retail Trade are presently underway by the three countries.

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Source: U.S. Census Bureau | North American Product Classification System (NAPCS) | (301) 763-2790 | |  Last Revised: July 16, 2012