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For information call:                                   For Immediate Release



Robert Marske

(301) 457-2547 

NEW CLASSIFICATION SYSTEM DEBUTS IN 1997 ECONOMIC CENSUS

Reports from the 1997 Economic Census will have a new look. The 1997 census will be the first major data set to be published according to the new North American Industry Classification System (NAICS). The new system has been jointly developed by the United States, Canada, and Mexico.

NAICS (pronounced "nakes") has been formally adopted by the U.S. Government, and replaces the Standard Industrial Classification (SIC) system, which has been in use since the 1930s to classify data about businesses. While the SIC system has been revised every 10 or 15 years, the new system represents a more dramatic change than any prior revision.

NAICS identifies dozens of new industries recognized for the first time. Some new industries reflect "high tech" developments, such as fiber optic cable manufacturing and satellite telecommunications. Other new industries simply recognize changes in the way business is done: bed and breakfast inns, environmental consulting, warehouse clubs and superstores, HMO medical center, and diet and weight reduction centers. (For more examples, see Table 1, below.)

NAICS groups industries into 20 broad sectors (see Table 2) that better reflect today's economy than do the 10 divisions of the old SIC system. For example, the new Information Sector brings together broadcasting and telecommunications, publishing, and computer-related services that were in unrelated parts of the old SIC. In response to the increased importance of services in the economy, "Service Industries" in the SIC are differentiated into all or parts of 9 new NAICS sectors. Other familiar sector titles like Manufacturing and Retail Trade have been revised in scope as well.

NAICS codes are six digits long, which allows more flexibility for future expansion than the four-digit SIC codes. Much as the coming of the year 2000 forces databases to be redesigned to accommodate a 4-digit year, NAICS will require a longer field for identifying industry codes in a wide variety of commercial and government databases.

Starting in 1999, nearly all data from the 1997 Economic Census will be reported according to NAICS. In 2000, the Census Bureau will publish comprehensive tables interrelating data on the old SIC and new NAICS bases. Other Federal statistics will convert to NAICS between 1999 and 2004.

The change from SIC to NAICS will not be obvious to most businesses filling out the economic census forms they receive in December 1997. Census forms break down sales by product line and ask about certain business practices; it is from those answers that the Census Bureau assigns the appropriate industry codes. Some of the categories on the forms have been adjusted to accommodate the new NAICS codes.

Major data users are excited about the improvements NAICS will bring. "More comparable, relevant and useful classifications can increase the bottom line of U.S. businesses", according to Joseph W. Duncan, senior economic advisor to Dun and Bradstreet. NAICS will facilitate the comparison of statistics among partners in the North American Free Trade Agreement (NAFTA)--the U.S., Canada, and Mexico. "This is going to open up a lot of opportunity for trade and regional partnering", says John Nofsinger of the Materials Handling Institute.

Below are listed examples of the many new industries NAICS identifies, and the 20 major sectors of the economy recognized in NAICS. Complete lists of the new codes, tables showing the relationships between SIC and NAICS categories, and articles (for example, "How NAICS Will Affect Data Users") are available on the Internet (www.census.gov/naics).

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Table 1: Selected New U.S. industries Being Identified in NAICS

Semiconductor machinery manufacturing

Fiber optic cable manufacturing

Software reproducing

Convenience stores

Gasoline stations with convenience food

Warehouse clubs and superstores

Food (health) supplement stores

Pet care services

Cable networks

Satellite telecommunications

Paging transmission services

Cellular and other wireless communications

Telecommunication resellers

Credit card issuing

Temporary help services

Telemarketing bureaus

Hazardous waste collection

HMO medical centers

Continuing care retirement communities

Casino hotels

Casinos

Other gambling industries

Bed and breakfast inns

Limited-service restaurants

Automotive oil change and lubrication shops

Diet and weight reducing centers

Table 2. Sectors of the Economy in NAICS

NAICS Sector title

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

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, Waste Management and Remediation Services

61 Educational Services

62 Health Care and Social Assistance

71 Arts, Entertainment and Recreation

72 Accommodation and Foodservices

81 Other Services (except Public Administration)

92 Public Administration

99 Unclassified Establishments