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).
Table 1: Selected New U.S. industries Being Identified in NAICS
Semiconductor machinery manufacturing
Fiber optic cable manufacturing
Gasoline stations with convenience food
Warehouse clubs and superstores
Food (health) supplement stores
Pet care services
Paging transmission services
Cellular and other wireless communications
Credit card issuing
Temporary help services
Hazardous waste collection
HMO medical centers
Continuing care retirement communities
Other gambling industries
Bed and breakfast inns
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
42 Wholesale Trade
44-45 Retail Trade
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