North American Product Classification System

The ultimate objective of NAPCS will be to develop an agreed-upon, integrated, and comprehensive list of products, product definitions, product codes, and a demand-side/market-oriented classification framework for both services and goods alike.

It is intended that NAPCS will be used throughout the statistical community to coordinate the collection, tabulation, and analysis of data on the value of products produced by both goods- and services-producing industries and on the prices charged for those products.

The focus in the initial phases of NAPCS will be directed at services-producing industries.

NAPCS and NAICS are complementary classification systems. However, the NAPCS classification and coding system will be independent of the NAICS classification and coding system.

Identical products produced by multiple industries will carry the same title, definition, and code numbers in NAPCS, regardless of their industries of origin.

Products data will be maintained in a manner that any product can be linked back to the industries that produce it and any industry can be linked back to the products it produces.

Service industries now account for almost 70% of economic activity, over 85 million employees, and a disproportionate share of economic growth, yet there remains a significant imbalance with respect to the information available on services industries, the fastest growing segment of the New Economy, compared with the wealth of information available for manufacturing industries.

If unaddressed, economic policymakers will be increasingly misinformed and misdirected about changes in the real economy, related to rates and sources of growth in output, prices, productivity, and trade. Moreover, this new services product information is critical to understanding some of the most hi-tech, dynamic, and rapidly growing areas of the service economy -- information, communication, computer services, business services, and health.

Presently, there exists no official body of information on the richness of products produced by such firms, what market groups they serve, and the important changes in product composition that are occurring as the industry evolves.

NAPCS provides for the development of a comprehensive list of services products that will be adopted by all three countries and incrementally implemented into their economic statistics programs. These detailed services product data will provide policymakers and the business community with the information needed to understand our increasingly important service industries.

NAPCS will enable the collection and tabulation of the source data needed to improve key economic measures of services growth, prices, productivity, and international trade in services

NAPCS will establish a standard for international classification of services products and significantly enhance both the ability to track international trade in services and the information available to U.S. representatives in trade negotiations for services.

NAPCS will provide useful information to service industry analysts who wish either to estimate market share for their firm or to investigate the growth of demand for the products of their firm with (a) those for the industry as a whole or (b) those that compete with or are closely associated with the products produced by the firm.

Input from industry experts provides essential guidance to the NAPCS subcommittees on a variety of issues including:

1. developing well-identified and well-defined lists of final products produced by the industry;
2. organizing the detailed products into grouping and aggregations that are meaningful to the industry; and
3. ensuring that the products identified in the lists are collectible in terms of the reporting units and recording practices of the industry.