North American Industry Classification System (NAICS) Beginning in November 2001, Industrial Employment Statistics will be released under the new North American Industry Classification System (NAICS). The data released will be the first quarter 2001 Covered Employment and Wages data. The NAICS system of classifying industries and reporting employment and wages represents a major departure from the decades-old Standard Industrial Classification (SIC) system, in use in this country since the 1930s. For more information on the SIC conversion to NAICS, please go to the Census bureau NAICS page http://www.census.gov/epcd/www/naics.html or browse through the following presentations: ! Texas LMI Bulletin (03/2003) Detailed information about the impact and relevance of the classification change to NAICS. ! NAICS overview presentation General overview ! NAICS press release (10/10/01)
Transcript
North American Industry Classification System(NAICS)
Beginning in November 2001, Industrial Employment Statistics will be released under the newNorth American Industry Classification System (NAICS). The data released will be the firstquarter 2001 Covered Employment and Wages data.The NAICS system of classifying industries and reporting employment and wages represents amajor departure from the decades-old Standard Industrial Classification (SIC) system, in use inthis country since the 1930s.For more information on the SIC conversion to NAICS, please go to the Census bureau NAICSpage http://www.census.gov/epcd/www/naics.html or browse through the followingpresentations:
! Texas LMI Bulletin (03/2003)Detailed information about the impact and relevance of the classification change to NAICS.
A Bulletin from the Texas Workforce Commission, Labor Market Information Department
An Explanation of the North AmericanIndustry Classification System (NAICS)
How it may affect Labor Market Information customers
IntroductionThe Office of Management and Budget (OMB) incooperation with agencies from Mexico and Canadahas developed an industry classification systemcalled the North American Industry ClassificationSystem (NAICS, pronounced "nakes") that replacedthe Standard Industrial Classification (SIC) system.While work has been underway since 1993, OMBformally adopted NAICS on January 16, 2001.
History of ProcessThe Office of Management and Budget establishedthe Economic Classification Policy Committee in1992 to pursue a fresh slate – the examination ofeconomic classifications for statistical purposes.1Since 1939 the U.S. has used the Standard IndustrialClassification (SIC) system for classifying industries.While SIC has undergone periodic revisions (the lastin 1987), rapid changes in the U.S. and worldeconomies has brought the system under increasedscrutiny. In response to the need for a classificationsystem that better reflected the dynamic nature ofeconomies, OMB established the EconomicClassification Policy Committee.2 Governmentagencies from the United States, Mexico and Canadawere tasked with the development of a system thataccounted for rapid changes in the U.S and worldeconomies.3
Industrial Classification vs.Occupational ClassificationNAICS is a system concerned with classifyingorganizations into different industries; as opposed toclassification at the occupational level. The newlyrevised Standard Occupational Classification (SOC)system classifies occupations by job duties.Occupations specific to certain industries may befound in a different industry category because of theshift to NAICS, yet the Standard OccupationalClassification Code remains the same. Systems likeO*NET and other classification systems based onSOC are not subject to changes because of the shift toNAICS. Professionals who use information at theoccupational level will not notice changes in jobcategories as a result of the shift to NAICS, unlessthey are looking at occupations by industry.
BenefitsComparable - NAICS is organized in such a way soas to allow direct comparison of economic data withour NAFTA trading partners Canada and Mexico.
Relevant -NAICS recognizes hundreds of newbusinesses in the economy with 20 broad industrysectors, up from SIC's 10. Some new industrycategories include an Information Sector and a HealthCare and Social Assistance Sector formerly lumpedinto Services under SIC.
Consistent - NAICS classifies an organization basedon how it produces something, not simply what itproduces. Businesses that use identical or similartechnologies and processes to produce something willbe grouped together. For example, software creationfalls under the new Information Sector, whilesoftware duplication falls under Manufacturing.Under SIC both enterprises were grouped under thesame major industry sector, because both wereengaged in the production of software.
Adaptable - Regular updates account for emergingindustries not currently known.
Things to ConsiderThe shift to NAICS means a break in historicaltime series. SIC and NAICS industry groupingsare not directly comparable since the codechanges for NAICS have split some SIC groups.
1Executive Office of the President Office of Management andBudget. North American Industry Classification System. WhitePlains, MD: Bernan and U.S. Department of Commerce, 2002
2ECPC is chaired by the Bureau of Economic Analysis, U.S.Department of Commerce, with representatives from the Bureau ofthe Census, U.S. Department of Commerce, and the Bureau ofLabor Statistics, U.S. Department of Labor
3Specifically, Mexico's Instituto Nacional de Estadistica,Geografia e Informafca (INEGI) and Statistics Canada
New Industries Reflected in NAICS
! NAICS heralds the creation of a new information sector that pulls businesses from communications, publishing,motion picture and sound recording and online services to recognize an information-based economy.
! Previously, under SIC, corporate headquarters were not distinguished from the industry category of the product orservice they produced. Now, corporate headquarters are recognized in the new Management Sector.
! Manufacturing is restructured to account for high-tech industries.
! An increase in the amount of detail overall accompanies the shift to NAICS including a further breakdown ofSIC's services sector into nine new sectors.
! Eating and Drinking Places move from Retail Trade into a new category called Accommodation and FoodServices.
! The difference between Retail and Wholesale Trade is now based on how each store conducts business. Forexample, many computer stores are reclassified from Wholesale to Retail.
Comparison of NAICS and SIC major industry groups
Below is a chart that outlines the major difference between NAICS and SIC industry categories.
SICStandard Industrial Classification
Agriculture, Forestry; and Fishing:MiningConstructionManufacturingTransportation, Communications and Public Utilities
Wholesale Trade Retail Trade
Finance, Insurance, and Real Estate
Services
Public Administration(parts of all divisions)
U.S. Bureau of the Census, U.S. Department of Commerce
NAICSNorth American Industrial Classification System
Agriculture, Forestry, Fishing, and HuntingMiningConstructionManufacturingUtilitiesTransportation and WarehousingWholesale TradeRetail TradeAccommodation and Food ServicesFinance and InsuranceReal Estate and Rental and LeasingInformationProfessional, Scientific, and Technical ServicesAdministrative Support; Waste Management and Remediation ServicesEducational ServicesHealth Care and Social AssistanceArts, Entertainment, and RecreationOther Services (except Public Administration)Public AdministrationManagement of Companies and Enterprises
The shift to NAICS means a break in historicaltime series. SIC and NAICS industry groupingsare not directly comparable since the codechanges for NAICS have split some SIC groups.
Impact on Labor Market Information Products
While everything produced by the Texas Workforce Commission’s Labor Market Information Department has beenimpacted by the shift to NAICS, the effect to the end user of LMI products will vary.
Job Vacancy or Benefits Surveys: Employers inthe local job vacancy or benefits surveys will beclassified under NAICS. Theses surveys will reportresults by industry using the new system.
ES-202/Covered Employment and Wages: Firstand Second quarter 2002 have been published usingNAICS, and are currently available from the LMIDepartment. Five quarters worth of data werecollected using both NAICS and SIC (first quarter2001 to first quarter 2002). Fourth quarter 2001 is thelast quarter Covered Employment and Wages werepublished using the SIC. A NAICS series back to1990 has been reconstructed and is available.
Current Employment Statistics/Non-AgriculturalWage and Salary Employment: January 2003 datafor the monthly survey of businesses were collectedaccording to NAICS. January numbers will beavailable in March 2003. Current EmploymentStatistics data dating back to 1990 are beingreconstructed based on the new NAICS systemand are scheduled to be released with revised data inMarch 2003. Occupational Employment Outlook/OccupationalProjections: Covering the years 2002-2012 will bepublished using NAICS in 2004. The current 2000-2010 projections are SIC based.
Occupational Employment statistics (OES)/WageSurvey: While employers in the OES sample will besorted and drawn according to NAICS in 2003, thesurvey will continue to publish wages by occupationaccording to the Standard Occupational Classificationsystem. The OES survey has been using the SOCoccupations since 1999.
The sample for the current survey was drawn basedon the SIC. Wage information that became availablein January 2003 was also still based on the SIC.
The survey sample for November 2002 was drawnbased on NAICS. Wage data collected for November2002 will be available around August 2003.Combined results of both November 2002 and May2003 surveys will be available February 2004.
Occupations by industry for Texas are available uponrequest, and will reflect NAICS industryclassifications beginning with the August 2003release.
Local Area Unemployment Statistics/Unemployment Rates were not directly impacted bythe shift to NAICS.
The shift to NAICS means a break in historicaltime series. SIC and NAICS industry groupingsare not directly comparable since the codechanges for NAICS have split some SIC groups.
For additional information contact the Labor Market Information Department of the Texas Workforce Commission.101 East 15th Street, Suite 103A, Austin, TX, 78778.Telephone 1-866-938-4444E-mail: [email protected] 1-512-491-4904Website: www.texasworkforce.org/lmi/
We would like to thank the Colorado Department of Labor and Employment for allowing us to use portions of theirNAICS information release.
February 2003
Additional Resources
Bureau of the CensusU.S. Department of Commercehttp://www.census.gov/epcd/www.naics.html
Bureau of Labor StatisticsU.S. Department of Laborhttp://www.bls.gov/bls/naics.htm
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WWWWWWWWhat is hat is NAICSNAICS??! NAICS (pronounced “nakes”) is the new North
American Industry Classification System.
! It replaces the decades-old Standard IndustrialClassification (SIC) system.
! It provides a better way to classify individualbusinesses.
! It will change what information is available.
! NAICS will reshape the way we view our changingeconomy.
NAICS presentation
Pronunciation: “nakes” Developed by the U.S., Canada, and Mexico, it will be the first-ever uniform system of North American industry classifications and will reshape our view of the U.S. economy. Replaces not only the U.S. Standard Industrial Classification (SIC) System (1987), but also the Standard Industrial Classification System of Canada (1980), and the Mexican Classification of Activities and Products (1994). A Better Way NAICS is constructed on a single conceptual framework and is supply-based, or production-oriented. In other words, establishments that do similar things in similar ways are classified together. Thus, it groups producing units, not products or services. New Information Available NAICS represents the first restructuring of the economic classifications system of the U.S. since the SIC was first developed in the 1930’s. Analysts have been having to contend with measuring the high-tech, services-oriented economy of the 2000’s using tools developed a half-century earlier when manufacturing was the dominant force in the economy. New View of the Economy The production-oriented classification concept will produce data that facilitate the analysis of production relationships in the economy, such as measuring productivity, unit labor costs, and other uses that relate to production. In other words, it permits the collection of data on inputs and outputs on a comparable basis, which is required for production-oriented analysis. On the other hand, it does not facilitate a comprehensive collection of data on the total output of a particular product or service, which is required for market-oriented analysis. NAICS also recognizes new industries and restructures industry groupings. It is designed to be flexible, so that as new industries emerge, they can be accommodated in the structure.
PPPPPPPPurpose and urpose and SSSSSSSScope of ancope of anIndustryIndustry Classification SystemClassification System::
! Facilitates the collection, tabulation,presentation and analysis of industrialdata.
! Promotes the uniformity andcomparability of statistical data.
! Covers entire field of economic activities.
NAICS presentation
Purpose Facilitates the collection, tabulation, presentation, and economic analysis of data describing various facets of the U.S. economy. Promotes the comparability and uniformity in the presentation of statistical data collected by various agencies, trade associations, and private research organizations. Scope Covers the entire field of economic activities and defines industries in accordance with the composition and structure of the economy.
CCCCCCCCodingoding PPPPPPPPrinciples:rinciples:
! Classification must conform to theexisting economic structure.
! Establishments are grouped intoindustries based upon the primaryactivity.
! Group of establishments in proposedindustry must be statistically significant.
NAICS presentation
Economic Structure To be recognized as an industry, the proposed classification must conform to the existing structure of American industry. This ensures that statistical agencies can produce information on inputs and outputs, industrial performance, productivity, unit labor costs, employment, and other statistics and structural changes. Primary Activity NAICS is an industry classification system that groups establishments into industries based on the activities in which they are primarily engaged. In other words, an industry is a grouping of economic activities. An establishment is classified to an industry when its primary activity meets the definition of that industry. Statistically Significant To be recognized as an industry, the group of establishments constituting the proposed classification must be statistically significant in the number of persons employed, the volume of business conducted, and the payroll.
NAICS Sectors vs. SIC Major Industry Divisions The highest level of aggregation under NAICS is the Sector. This is equivalent to the SIC Major Industry Division. However, there are 20 NAICS Sectors vs. 10 SIC Major Divisions. These 20 NAICS Sectors break down into 1,170 NAICS Industries compared to 1,004 SIC Industries. (More on next slide)
NAICSNAICS Codes and Sectors (cont.)Codes and Sectors (cont.)
Code Sector
61 Educational Services62 Health Care and Social Assistance71 Arts, Entertainment, and Recreation72 Accommodation and Food Services81 Other Services92 Public Administration
513322 Cellular and other WirelessTelecommunications
NAICS presentation
Structure of NAICS The structure of NAICS is hierarchical. The first two digits of the structure designate the NAICS sectors that represent general categories of economic activities. Information Sector Example: For an example, we will look at Sector 51, which is the Information Sector and its Subsector Broadcasting and Telecommunications. It further breakdown into the following sub-categories (see above). NAICS Numbering System: 1st two digits: Sector (click 1st arrow) 3rd Digit: Subsector 4th Digit: Industry Group 5th Digit: NAICS Industry Industries are comparable among the three NAFTA countries to the 5th digit. 6th Digit: U.S. Industry The 6th digit is used to identify specific industries within the individual countries and may or may not be comparable.
SIC vs. NAICSSIC vs. NAICS
Although NAICS and SIChave similar hierarchicalnumeric structures, thereis no relationship betweenthe two numberingsystems.
NAICS presentation
Major Point: Although NAICS and SIC have similar numeric structures, there is no relationship between the numeric industry codes.
Example:Example:
3341 Secondary Smelting 3341 Computer and Peripheral
Example: Here is a comparison of the SIC 3-digit Industry Group 334 vs. NAICS 3-digit Subsector 334. As you can see, they identify two very different Industrial activities. Taking it a step further, we can also see that the SIC 4-digit Industry 3341 and the NAICS 4-digit Industry Group 3341 not only have no correlation, but the NAICS breaks down into two additional sub-categories.
AAuxiliary Units: uxiliary Units: SIC vs. NAICSSIC vs. NAICS
Auxiliary units are establishments that primarilyprovide support services for other establishmentsof the same company. Examples: Headquarters,Warehouses, Research and Development, etc.
! In the SIC, auxiliary establishments are classifiedaccording to the primary activity of theestablishments they served.
! Under NAICS, auxiliary establishments areclassified according to their primary activity.
NAICS presentation
Auxiliary Establishments: Definition Another significant change under NAICS is the treatment of Auxiliary establishments. These are establishments that primarily provide support services for other establishments of the same company. Generally, the support services are not provided or intended for use outside of the company. Examples: Headquarters, Warehouses, Research and Development, etc. SIC vs. NAICS In the SIC, auxiliary establishments primarily engaged in supporting other locations of the same company were classified according to the primary activity of the establishments they served. Under NAICS, auxiliary establishments are completely redefined. These separate establishments are classified according to their primary activity. In other words, NAICS classifies auxiliaries based on what they do, not based on whom they serve.
NAICS Alternate Aggregation Tree Under NAICS we will have the opportunity to look at the North American economy in alternative ways. One way we plan to do this is to aggregate the information produced into two distinct clusters: Goods Producing Cluster Service Providing Cluster These Clusters will then be subdivided into Sectors and Sector Groupings. These Sectors and Sector Grouping will then be referred to as Super Sectors.
Natural Resources Fishing and Hunting& Mining Group
Sector 21 – Mining
Goods Production Sector 23 – ConstructionGroup
Sector 31-33 – Manufacturing
Sector 22 - Utilities
Trade, Transportation, Sector 42 – Wholesale Tradeand Utilities Group
Sector 44-45 – Retail Trade
Sector 49-48 – Trans. and Warehousing
Information Sector 51 – Information
GoodsProducingCluster
ServiceProvidingCluster(conti.)
NAICS presentation
The Good Producing Cluster (Super Sectors): Raw Materials and Energy Production Group Goods Production Group Distribution & Transportation of Goods Group Information Sector Because NAICS provides for a more detailed breakdown of the economy, much of the data that is currently being released will become non-disclosable based on the DOL and State rules regarding confidentiality. With the Super Sector aggregations, we would be able to alleviate some of these restrictions.
Financial Activities Sector 52 – Finance and InsuranceGroup
Professional and Sector 55 – Management of Companies andBusiness Svcs. Group Enterprises
Sector 56 – Administrative and Support,Waste Mgmt. and Remediation Svcs.
Education & Health Sector 61 – Educational ServicesServices Group
Sector 62 – Health and Social Assistance
Leisure & Hospitality Sector 71 – Arts, Entertainment, and RecreationGroup
Sector 72 – Accommodations and Food Services
ServiceProvidingCluster(conti.)
Other Services Sector 81 – Other Services (ex. Public Adm.)
Public Administration Sector 92 – Public Administration
NAICS presentation
Service Providing Cluster (Super Sectors): Fire, Rental and Leasing Group Professional and Business Svcs. Group Education, Health and Social Assistance Services Group Leisure, Accommodation and Food Svcs. Group Other Services Sectors Public Administration Sector
HHHHHHHHow will ow will NAICSNAICS affect the affect theeconomic data I use?economic data I use?
! Every sector of the economy has beenrestructured and redefined.
! There are 710 new or revised NAICSindustries that have no SIC counterpartsand are not directly traceable to previousSIC classifications.
! The improved statistics resulting from theimplementation of NAICS will also result intime series breaks.
NAICS presentation
Every Sector Restructured and Redefined. Nonetheless, data for more than two-thirds of all 4-digit SICs will be derivable from the NAICS system, either because the industry is not being changed (other than in code), or because new industries are being defined as subdivisions of old ones. For example: Refuse Systems is one industry in the SIC but is subdivided into five categories under NAICS. On the other hand: 710 new or revised NAICS industries Some Wholesale Trade establishments in a number of industries, for example, Computer Equipment Wholesalers and Office Supply Stores, are being reclassified into corresponding industries in Retail Trade if they sell primarily through storefront locations similar to other retail establishments. Time Series Breaks Many other industries are being changed even more profoundly, leading to breaks in the availability of time series data. The implementation of NAICS will cause major disruptions in the availability of such time series information, not only for individual industries that are redefined but also for the broad sectors, like manufacturing and retailing, that we use to describe our economy in everyday conversation.
UI Tax Rate &Actuarial Analysis
UI-Covered Employment& Unemployment
Local Area UnemploymentStatistics
Personal Income & GDP (BEA)
Industrial Analysis
Economic Forecasting
CurrentEmployment
Statistics
OccupationalEmployment
Statistics
Job Creation Studies
Longitudinal Analysis
Size-of-Firm Analysis
Price Surveys
National CompensationSurvey
Current EmploymentStatistics Survey
Hours at Work Survey
OccupationalEmployment Survey
Occupational Safetyand Health Survey
OccupationalSafety and
Health Statistics
Programmatic Uses
SurveyBenchmarking
General Economic Uses
ES-202, orCovered
Employmentand Wages,
Data
BusinessEstablishment
List
Analytical Uses
Sampling
Mass Layoff Statistics
State Revenue Projections
Jobs Openings &Labor Turnover
Statistics
Job Openings & LaborTurnover Statistics
USES OF ES-202, ORCOVERED EMPLOYMENT AND WAGES, DATA
File Supplement for othereconomic programs (NAICS)
Average Annual PayPress Releases
Special ResearchStudies
NAICS presentation
ES-202 Data Uses This an example of the various uses of the ES-202 Data. From this diagram, it is clearly evident that the implementation of NAICS will have broad and profound impacts on many data series: Survey Benchmarking General Economic Uses (i.e., State Revenue Projections, Economic Forecasting, Industrial Analysis, GDP)) Analytical Uses Sampling Programmatic Uses
MMMMMMMMajorajor changes by Sector: changes by Sector:! A new Information sector combines
communications, publishing, motionpicture and sound recording, and onlineservices, recognizing our information-based economy.
! Manufacturing is restructured to recognizenew high-tech industries. A newsubsector is devoted to computer andelectronics, including reproduction ofsoftware.
NAICS presentation
Information Perhaps the most important change in NAICS is the recognition of the new Information Sector. This new sector includes those establishments that create, disseminate, or provide the means to distribute information. Establishments moving from other industry divisions into this new sector are Newspaper, Book, and Periodical Publishers, Software Publishers, Broadcasting and Telecommunications Producers and Distributors, and Motion Picture and Sound Recording Industries, Information Services, and Data Processing Services. Some of the new industries include Paging, Cellular and Other Wireless Telecommunications, and Satellite Telecommunications. Also included are establishments that provide data processing services. Manufacturing All or Parts of 12 2-digit SIC codes previously in Manufacturing will be moving to other sectors. All of parts of 21 2-digit SIC codes that were previously in other industries will be now classified in Manufacturing. The Manufacturing sector is reorganized and re-sequenced to achieve comparability with Canada and Mexico. The most significant change to manufacturing is the creation of the Computer and Electronic Product Manufacturing sub-sector. This new sub-sector brings together those establishments engaged in the production of computers, computer peripherals, communications equipment, similar electronic products, and the components for such products. Additionally, a number of important activities have been moved out of Manufacturing while other activities have moved in. For example, Publishing has moved to the new Information Sector and Logging to Agriculture, Forestry, and Fishing. Coming into Manufacturing are Bakeries that bake on the premises and establishments that do Custom Manufacturing.
MMMMMMMMajorajor changes by sector: (cont.) changes by sector: (cont.)! Retail Trade is redefined. Eating and
drinking places are transferred to a newAccommodation and Food Servicessector.
! Also, the difference between Retail andWholesale is now based on how eachstore conducts business. The SIC wasbased on the class of the customer.
! Internet Commerce is fully recognizedthroughout the various NAICS sectors.
NAICS presentation
Accommodation and Food Services A new sector combines Hotels and Other Lodging places from Services and Eating and Drinking places from Retail Trade to form the Accommodation and Food Services Sector. Retail and Wholesale Trade NAICS redefines the boundaries between Retail and Wholesale Trade. The new NAICS definition emphasizes what the establishment does, rather than to whom it sells. Retail establishments have a selling place open to the public; merchandise on display or available through sales clerks; facilities for making cash or credit card transactions; and services provided to retail customers. In contrast, Wholesalers normally operate from a warehouse or office and are characterized by having little or no display of merchandise. Neither their design nor the location of the premises is intended to solicit walk-in traffic. Additionally, Wholesalers usually do not use advertising directed to the general public. Another major change in Wholesale Trade is that Agents and Brokers are now classified in the same NAICS codes regardless of the product sold. Under the SIC, they were classified in Wholesale Trade based on the product sold. Internet Commerce (significant change) NAICS identifies hundreds of new, emerging, and advanced technology industries. Establishments that conduct business over the Internet are identified with specific industry classifications under NAICS, including Internet Shopping, Internet Publishers, Internet Broadcasting, and Other Services provided via the Internet. Internet Auctions and Internet Sales will all be in sector 45 regardless of the item being auctioned or sold. The ‘no brick or mortar’ rule must apply in order to be classified as Internet sales. In other words there cannot be any store front operation. All other Internet services such as Internet publishing, broadcasting, and Internet entertainment sites will be in sector 51.
NNewew Developments inDevelopments in NAICSNAICS!Construction (Sector 23)
Change has been made to differentiate betweenresidential and non-residential.
!Department Stores (Sector 45)Dept. stores and Discount stores are classifiedinto different NAICS codes because of where theircheck-out registers are located.
!Warehouse Clubs/Super Ctrs (Sector 45)Now have their own NAICS code.
NAICS presentation
Construction (Sector 23) In construction, the major change has been made to differentiate between residential and non-residential. Department Stores (Sector 45) Dept. stores and Discount stores are classified into different NAICS codes because of where their check-out registers are located. For example, stores such as Dillard’s and Foleys would be coded 452111 for dept. stores because their separate departments each have separate cash registers and sales associates. On the other hand a store such as Target, although has registers in departments such as Electronics and Jewelry, has a central customer checkout area in the front of the store. Warehouse clubs and Super Centers (Sector 45) Warehouse clubs and Super Centers such as Sam’s and Super Wal-Marts sell a wide range of products with no one product predominating. In addition, they also sell fresh, perishable foods. These stores also have 50 or more employees. They have their own NAICS code.
SIC 7389 BusinessSIC 7389 BusinessServices, NECServices, NEC
Equivalent NAICS Codes and Descriptions:313311 Broadwoven Fabric Finishing 561431 Private Mail Ctrs.
561421 Telephone Answer Svcs. 812990 All Other Personal Svcs.
561422 Telemarketing
EEEExample:
NAICS presentation
Example: SIC 7389, Business Services, NEC Of the 1004 SIC industries, 459 (46%) represent Manufacturing industries even though the manufacturing component of the Gross Domestic Product (GDP) has shrunk to under 20%. On the other hand, Service industries were considerably under-represented. For example: one of the fastest growing U.S. service industries over the past several years was SIC 7389, Business Services, NEC. The NAICS captures this growth, and SIC 7389 is breaking out into 46 new industry codes. Here is a partial listing of the new NAICS codes. Examples of others with multiple NAICS codes for a single SIC: 1799 Special Trade Contractors, NEC has 13 NAICS breakouts. 5099 Durable Goods, NEC has 8 NAICS breakouts
WWWWWWWWhen will hen will NAICSNAICS-based-based statistics be available? statistics be available?
! The Covered Employment and Wages Report(ES-202) will be NAICS-based beginning withthe First Quarter 2001 release (Sept. 2001).
! Current Employment Statistics (CES) data willbe NAICS-based beginning with release of theJanuary 2003 re-estimates (Feb. 2003).
! Implementation by other programs andFederal agencies will be in phases. SomeDOL programs will not convert until 2004.
NAICS presentation
Covered Employment & Wages 202 will publish NAICS 2002-based data for 2001 and 2002, based on NAICS, not NAICS treatment of auxiliaries (NTSA). No NAICS 1997-based data will ever be published. There will NOT be a dual-release of ES-202 data that is SIC-based with the conversion to NAICS in 1st Quarter 2001 (September 2001). No SIC-based data after year 2000. Current Employment Statistics (CES) NAICS-based beginning with release of the Jan. 2003 re-estimates in Feb. 2003. Other Programs Implementation will be phased in. Last to convert will be in 2004.
IIIIIIIImplementing mplementing NAICSNAICSNAICSNAICSNAICSNAICSNAICSNAICS at the at theBureau of Labor Statistics:Bureau of Labor Statistics:
! ES-202 Program 1st. Qtr. 2001 Fall 2001! CPS Program Jan. 2003 Feb. 2003! MLS Program Jan. 2002 March 2002! OES Program 4th Qtr. 2002 Jan. 2004
ProgramOffice/Program Reference Publication
Period Date
NAICS presentation
Publication Dates: ES-202: Fall 2001 Current Population Survey: February 2003 MLS: March 2002. OES: January 2004 with publication of Fourth Quarter 2002 data. Last to implement NAICS.
TheThe20022002NAICSNAICSManualManual
Superintendent of Documents
Mail: 1100 Commerce St., Rm. 1C42
Dallas, TX 75242
Phone: (214) 767-0076
Online: http://www.access.gpo.gov/sales
NAICS presentation
NAICS Manual The new 2002 NAICS United States Manual will be available in August 2001. Copies can be obtained from the U.S. Superintendent of Documents Bookstore in Dallas. Mail:1100 Commerce St., Rm. 1C42 Dallas, TX 75242 Phone:(214) 767-0076. Online: http://www.access.gpo.gov/sales Price:$32.50
ConclusionsConclusions! In the long run, the conversion of economic
statistics from the SIC system to NAICS will be animportant step toward providing a strongfoundation for statistical information in comingdecades.
! The data user community faces a major upheavaland will lose some of their ability to look atconsistent statistics over time.
! The TWC LMI Department will undertakeadditional educational and analytical activities tofacilitate the transition to NAICS.
For more info: 1-800-227-7816 (TWC LMI Department)
AUSTIN — The Texas Workforce Commission’s Labor Market Information Department is set to beginreleasing industrial employment statistics under the new North American Industry Classification System(NAICS) beginning with the release of first quarter 2001 Covered Employment and Wages data next month.
The NAICS system of classifying industries and reporting employment and wages represents a majordeparture from the decades-old Standard Industrial Classification (SIC) system in use in this country since the1930s. The SIC system was originally developed during a period when the nation’s economy was morepredominately manufacturing-based than today. Differences between NAICS and SIC include the conceptualapproach used to define industries, as well as the number of levels of industrial hierarchy.
Under NAICS, economic units are classified according to their production process. This approach not onlyprovides the means for capturing information related to new and emerging industries, but allows for moredetailed categorization of service industries. While NAICS uses a hierarchical structure much like the SIC,there are a number of important differences. For example, NAICS uses a six-digit classification code whichallows greater flexibility in the coding structure, where the SIC system is limited to only four digits. Anotherimportant difference is that NAICS uses the first two digits of the six-digit code to designate the highest levelof aggregation, with 21 such two-digit industry sectors. Under the SIC system, by contrast, there are only 11divisions, designated by letters of the alphabet. Another goal achieved under NAICS is the creation of anindustrial classification system that allows for direct comparison of employment data between the threeNAFTA trading partners — the United States, Canada and Mexico. This is made possible through the fifthdigit of the NAICS code, which represents the international industry level.
While the conversion to NAICS will provide levels of industrial employment detail not previously available,this historic transition may prove challenging for some data users. In many cases, the NAICS changes are sosignificant that reconstructing historical data based on the new system will be difficult, leading to breaks inmany statistical time series that are based on the SIC system. Beginning with the release of first quarter 2001data, Covered Employment and Wages will be available by NAICS code only. There will be no dual release(SIC and NAICS) of this data series. Periods prior to first quarter 2001 will still be available by SIC code.
The Labor Market Information Department (LMI) will be available to assist its data customers who havequestions regarding this transition to NAICS. Please contact LMI at 1-866-938-4444 (toll free), or by email [email protected].
The following website contains additional information about NAICS: http://www.twc.state.tx.us/lmi/naics/naicshome.html
