1997 Economic Census, Concept Definitions

An establishment is a single physical location at which business is conducted. It is not necessarily identical with a company or enterprise, which may consist of one establishment or more. Economic Census figures represent a summary of reports for individual establishments rather than companies. For cases where a census report was received, separate information was obtained for each location where business was conducted. When administrative records of other Federal agencies were used instead of a census report, no information was available on the number of locations operated. Each Economic Census establishment was tabulated according to the physical location at which the business was conducted. The count of establishments represents those in business at any time during 1997.

When two activities or more were carried on at a single location under a single ownership, all activities generally were grouped together as a single establishment. The entire establishment was classified on the basis of its major activity and all data for it were included in that classification. However, when distinct and separate economic activities (for which different industry classification codes were appropriate) were conducted at a single location under a single ownership, separate establishment reports for each of the different activities were obtained in the census.

SECTOR-SPECIFIC INFORMATION:

Construction sector - Includes all establishments that were in business at any time during the year. It covers all full-year and part-year operations. Construction establishments which were inactive or idle for the entire year were not included.

Manufacturing sector - Includes all manufacturing establishments (plants) with one employee or more, and establishments in operation at any time during the year.

Retail sector - Leased departments are treated as separate establishments and are classified according to the kind of business they conduct. For example, a leased department selling shoes within a department store would be considered a separate retail establishment under the "shoe store" classification.

Services sectors - Leased service departments (separately owned businesses operated as departments or concessions of other service establishments or of retail businesses, such as a separately owned shoeshine parlor in a barber shop, or a beauty shop in a department store) are treated as separate service establishments for census purposes. Leased retail departments located in service establishments (e.g., a gift shop located in a hotel) are considered separate retail establishments.

Counts of establishments in most economic census reports do not include "nonemployers", i.e., establishments with no paid employees. See the separate Nonemployer Statistics report.

Firms -- A firm is a business organization or entity consisting of one domestic establishment (location) or more under common ownership or control. All establishments of subsidiary firms are included as part of the owning or controlling firm. For the economic censuses, the terms "firm" and "company" are synonymous.

Auxiliary establishments -- Each company included in this census was asked to identify and report separately those auxiliary locations whose primary functions were to manage, administer, service, or support the activities of the other establishments of the company. Data presented in this report does not include auxiliary establishments. Data for auxiliaries which primarily service retail establishments are presented in a subsequent report issued as part of the 1997 Enterprise Statistics reports.

PAID EMPLOYEES FOR PAY PERIOD INCLUDING MARCH 12

Paid employees consist of the full-time and part-time employees, including salaried officers and executives of corporations. Included are employees on paid sick leave, paid holidays, and paid vacations; not included are proprietors and partners of unincorporated businesses. The definition of paid employees is the same as that used on IRS form 941.

SECTOR-SPECIFIC INFORMATION:

Construction and Manufacturing sectors - Comprises all full-time and part-time employees on the payrolls of establishments who worked or received pay for any part of the pay period including the 12th of March, May, August, and November, divided by 4.

Finance and Insurance, and Real Estate and Rental and Leasing sectors - Also excluded are independent (commission) agents, and employees of departments or concessions operated by other firms.

Mining sector - Also included are employees working for miners paid on a per ton, car, or yard basis. Excluded are employees at the mine but on the payroll of another employer (such as employees of contractors) and employees at company stores, boardinghouses, bunkhouses, and recreational centers. Also excluded are members of the Armed Forces and pensioners carried on the active rolls but not working during the period.

All other sectors - Includes all employees who were on the payroll during the pay period including March 12.

ANNUAL PAYROLL

Payroll includes all forms of compensation such as salaries, wages, commissions, dismissal pay, bonuses, vacation allowances, sick-leave pay, and employee contributions to qualified pension plans paid during the year to all employees. For corporations, payroll includes amounts paid to officers and executives; for unincorporated businesses, it does not include profit or other compensation of proprietors or partners. Payroll is reported before deductions for social security, income tax, insurance, union dues, etc. This definition of payroll is the same as that used by the Internal Revenue Service (IRS) on form 941.

SECTOR-SPECIFIC INFORMATION:

Accommodation and Foodservices and other services sectors - Also included are tips and gratuities received by employees from patrons and reported to employers and the value of payments in kind (e.g., free meals and lodgings).

Finance and Insurance, and Real Estate and Rental and Leasing sectors - Also included are tips and gratuities received by employees from patrons and reported to employers and the value of payments in kind (e.g., free meals and lodgings). Payroll does not include commissions paid to independent (nonemployee) agents, such as insurance and real estate agents.

Manufacturing sector - Also excluded are payments to members of Armed Forces and pensioners carried on the active payrolls of manufacturing establishments.

Mining sector - Also included are payments received on a ton, car, or yard basis; excluded are payments to members of Armed Forces and pensioners carried on the active payroll of mining establishments. Also excluded are royalty payments to unions and costs of smithing, explosives, fuses, electric cap lamps, and mine supplies used in production, development, and exploration work but charged to employees and deducted from their wages.

First quarter payroll

This item consists of payroll, as defined above, paid to persons employed at any time during the quarter January to March 1997.

SALES, SHIPMENTS, RECEIPTS, REVENUE, OR BUSINESS DONE

SECTOR-SPECIFIC INFORMATION:

Construction sector - Includes the sum of value of construction work and other business receipts for work done by establishments during the year. Included is new construction, additions and alterations or reconstruction, and maintenance and repair construction work. Also included is the value of any construction work done by the reporting establishments for themselves.

Speculative builders were instructed to include the value of buildings and other structures built or being built for sale in the current year but not sold. They were to include the costs of such construction plus normal profit. Also included is the cost of construction work done on buildings for rent or lease.

Establishments engaged in the sale and installation of such construction components as plumbing, heating, and central air conditioning supplies and equipment; lumber and building materials; paint, glass, and wallpaper; and electrical and wiring supplies, elevators or escalators were instructed to include both the value for the installation and the receipts covering the price of the items installed.

Excluded was the cost of industrial and other specialized machinery and equipment which are not an integral part of a structure.

Finance and Insurance, and Real Estate and Rental and Leasing sectors - Includes revenue from all business activities whether or not payment was received in the current year, including net premiums earned by insurance carriers, commissions and fees from all sources, rents, net investment income, interest, dividends, and royalties. Rental revenue from leasing property marketed under operating leases is included, as well as interest earned from property marketed in the current year under capital, finance, or full payout leases. Revenue also includes the total value of service contracts, amounts received for work subcontracted to others, rents from property sublet to others, and dues and assessments from members.

Revenue does not include sales and other taxes collected from customers and remitted directly by the firm to a local, State, or Federal tax agency. Revenue also does not include financial, insurance, or real estate revenue of manufacturers, wholesalers, retail, or service establishments, or other businesses whose primary activity is other than finance, insurance, or real estate.

Manufacturing sector - Covers the received or receivable net selling values, f.o.b. 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 resold without further processing. Included are all items made by or for the establishments from materials 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.

Mining sector - Includes the net selling values, f.o.b. mine or plant after discounts and allowances, excluding freight charges and excise taxes. Shipments includes all products physically shipped from the establishment during 1992, including material withdrawn from stockpiles and products shipped on consignment, whether or not sold in the current year. Prepared material or concentrates includes preparation from ores mined at the same establishment, purchased, received from other operations of the same company, or received for milling on a custom or toll basis. For products transferred to other establishments of the same company or prepared on a custom basis, companies were requested to report the estimated value, not merely the cost of producing the items. Multiestablishment companies were asked to report value information for each establishment as if it were a separate economic unit. They were instructed to report the value of all products transferred to other plants of the company at their full economic value; to include, in addition to direct cost of production, a reasonable proportion of company overhead and profits.

For all establishments classified in an industry, value of shipments and receipts includes (1) the value of all primary products of the industry; (2) the value of secondary products which are primary to other industries; (3) the receipts for contract work done for others, except custom milling; and (4) the value of products purchased and resold without further processing. Receipts for custom milling are not included to avoid duplication with the value of custom milled ores included in an industry's primary and secondary products. Some duplication exists in industry and industry group totals because of the inclusion of materials transferred from one establishment to another for mineral preparation or resale.

Retail sector - Sales include merchandise sold for cash or credit at retail and wholesale by establishments primarily engaged in retail trade; amounts received from customers for layaway purchases; receipts from rental or leasing of vehicles, equipment, instruments, tools, etc.; receipts for delivery, installation, maintenance, repair, alteration, storage, and other services; the total value of service contracts; and gasoline, liquor, tobacco, and other excise taxes which are paid by the manufacturer or wholesaler and passed on to the retailer.

Sales are net after deductions for refunds and allowances for merchandise returned by customers. Trade-in allowances are not deducted from total sales. Total sales do not include carrying or other credit charges; sales (or other) taxes collected from customers and forwarded to taxing authorities; commissions from vending machine operators; sales and receipts of departments or concessions operated by other firms; commissions or receipts from the sale of government lottery tickets; installment payments from leasing of vehicles, equipment, instruments, tools, etc. marketed under capital, finance, or full payout leases; and nonoperating income from such sources as investments, rental or sale of real estate, etc.

Sales in this report do not include retail sales made by manufacturers, wholesalers, service establishments, or other businesses whose primary activity is other than retail trade. They do include receipts other than from the sale of merchandise at retail, e.g., service receipts, sales to industrial users, and sales to other retailers, by establishments primarily engaged in retail trade.

Services sectors (Taxable Establishments) - Includes receipts from customers or clients for services rendered, from the use of facilities, and from merchandise sold during the year whether or not payment was received in the year, except for health practitioners and legal, architectural, engineering, and surveying services, which reported on a cash basis (payments received in the year regardless of when services were rendered). Excise taxes on gasoline, liquor, tobacco, etc., which are paid by the manufacturer or wholesaler and passed on in the cost of goods purchased by the service establishment, are also included. Receipts from leasing of vehicles, equipment, etc. marketed under operating leases are included in receipts figures as well as the fair sales value of merchandise marketed in the year under capital, finance, or "full payout" leases. Receipts also include the total value of service contracts, amounts received for work subcontracted to others, and dues and assessments from members and affiliates.

Receipts are net after deductions for refunds and allowances for merchandise returned by customers. Receipts do not include sales, occupancy, admissions, or other taxes collected from customers and remitted directly by the firm to a local, State, or Federal tax agency, nor do they include income from such sources as contributions, gifts, and grants; dividends, interest, and investments; or sale or rental of real estate. Also excluded are rents from and receipts (gross as well as the establishment's share) of departments and concessions which are operated by others; sales of used equipment rented or leased to customers; commissions from vending machine operators; and other nonoperating income such as royalties, franchise fees, etc.

Receipts in this report do not include service receipts of manufacturers, wholesalers, retail establishments, or other businesses whose primary activity is other than service. They do, however, include receipts other than from services rendered (e.g., sale of merchandise to individuals or other businesses) by establishments primarily engaged in performing services and classified in the service industries.

Services sectors (Tax-Exempt Establishments) - Includes revenue from customers or clients for services rendered and merchandise sold during the year, whether or not payment was received in the year. Also included are income from interest, dividends, gross contributions, gifts, grants (whether or not restricted for use in operations), rents, royalties, dues and assessments from members and affiliates, and receipts from fundraising activities. Receipts from taxable business activities of firms exempt from Federal income tax (Unrelated Business Income) are also included in revenue.

Revenue does not include sales, admissions, or other taxes collected by the organization from customers or clients and paid directly to a local, State, or Federal tax agency; income from the sale of real estate, investments, or other assets (except inventory held for resale); gross receipts of departments, concessions, etc., that are operated by others; and amounts transferred to operating funds from capital or reserve funds.

Transportation and Warehousing, and Utilities sectors - Operating revenue is the basic dollar volume measure for transportation and warehousing and utilities establishments covered by the census. Includes gross revenue from customers or clients for services rendered, from the use of facilities, and from merchandise sold in the year, whether or not payment was received in the year. Travel agents, shipping agents, and shipping brokers were to report commissions rather than gross billings or sales. Tour operators were to report the difference between the selling price of their tours and the amounts paid to suppliers, and freight forwarders were to report the difference between gross charges and the amounts paid to other transportation companies (net).

Rental revenue from leasing of vehicles, railroad cars, equipment, instruments, tools, etc., marketed under operating leases are included in revenues as well as the fair sales value of merchandise marketed in the year under capital, finance, or "full payout" leases. Revenues also include the total value of service contracts, amounts received for work subcontracted to others and from repair services provided to others, and dues and assessment from members and affiliates. Revenues are net after deductions for refunds and allowances for merchandise returned by customers.

Information sector - Telephone service establishments were to include revenue received from international calls originating in the United States (including that portion paid to foreign countries for accessing their network). These establishments were to include allowances for uncollectible accounts.

Network and broadcast stations were to include advertising sales net of commissions paid to agency representatives and brokers.

Revenues do not include sales, occupancy, admissions, or other taxes collected directly from customers and paid directly by the firm to a local, State, or Federal tax agency, nor do they include income from such sources as contributions, gifts, and grants; dividends, interest, and investments; or sale or rental of real estate. Also excluded are rents and revenue (gross as well as the establishment's share) from departments or concessions which are operated by others; sales of used equipment rented or leased to customers; commissions from vending and amusement machine operators; and other nonoperating income such as royalties and franchise fees. Telephone service establishments were to exclude revenue collected on behalf of another company. Tax-exempt broadcast stations were to exclude contributions, gifts, grants, and other nonoperating income.

Wholesale sector - Sales include merchandise sold for cash or credit at wholesale and retail by establishments primarily engaged in wholesale trade; receipts from rental or leasing of vehicles, equipment, instruments, tools, etc.; receipts for delivery, installation, maintenance, repair, alteration, storage, and other services; and gasoline, liquor, tobacco, and other excise taxes which are paid by the manufacturer and passed on to the wholesaler.

Sales are net after deductions for refunds and allowances for merchandise returned by customers. Trade-in allowances are not deducted from total sales. Total sales do not include carrying or other credit charges; sales (or other) taxes collected from customers and forwarded to taxing authorities; and nonoperating income from such sources as investments, rental or sale of real estate, etc.

Sales in this report do not include wholesale sales made by manufacturers, retailers, service establishments, or other businesses whose primary activity is other than wholesale trade. They do include receipts other than from the sale of merchandise at wholesale, e.g., service receipts, retail sales, etc., by establishments primarily engaged in wholesale trade.

Sales figures include sales of all establishments in business at any time during the year. Sales shown for agents and brokers represented the value of the goods involved in the transactions rather than the commissions received or earnings.

EXPENSES FOR TAX-EXEMPT SERVICE INDUSTRIES

Merchant wholesalers who take title to the goods they sell, such as wholesale merchants or jobbers, industrial distributors, voluntary group wholesalers, drop shippers, retailer cooperative warehouses, terminal elevators, and cooperative buying associations.

Manufacturers' sales branches and offices (but not retail stores) maintained by manufacturing or mining enterprises apart from their plants or mines for the purpose or marketing their products. Sales branches and offices located at plants are included when separate records are available.

Agents, brokers, and commission merchants who buy or sell products owned by others on a commission or agency basis.

INVENTORIES (Construction Industries)

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