Implementation of NAICS: North American Industry Classification System

1
Implementation of NAICS North American
Industry Classification System
2
What is NAICS?

• New Industry Classification System

• Concept Group establishments by
  production processes
• Established in 1997
• Developed in cooperation with our NAFTA partners,
  Canada and Mexico

3
Why Develop NAICS?

• SIC was
• Developed in the 1930s

• Emphasized manufacturing, not growing service
  and high tech industries
• Revisions made little change to the original
  structure
• Last revised in 1987

4
How Does NAICS Differ from SIC?

• Based on the production function concept

• Emphasizes new and emerging industries,
  high-technology industries, and service
  industries
• Provides for comparability with Canada and Mexico
• Will be regularly maintained, current plans are
  for revisions every 5 years 2002, 2007, etc.

5
What is the NAICS Structure?
20 sectors (21 counting Unclassified) 1.198
Industries (US) 175 more than under SIC
system 6-digit numbering system
6
NAICS Sectors
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 and Warehousing 51
Information 52 Finance and Insurance 53
Real Estate Rental Leasing
7
NAICS Sectors
54 Professional, Scientific Technical
Services 55 Management of Companies and
Enterprises 56 Administrative Support
Waste Management Remediation
Services 61 Educational Services 62 Health
Care Social Assistance 71 Arts,
Entertainment, Recreation 72 Accommodation
Food Services 81 Other Services (except public
administration) 92 Public Administration 99
Unclassified
8
NAICS Alternate Aggregation Tree
9
NAICS/SIC Structure
NAICS 2-digit Sector 3-digit
Subsector 4-digit Industry Group 5-digit
NAICS Industry 6-digit U.S. Industry
SIC Division Letter 2-digit Major
Group 3-digit Industry Group 4-digit
Industry
10
NAICS Structure
As with SIC, more digits more detail
11
NAICS - North American Industry Classification
System
  Number of codes   6 digit - 1,198   5
digit - 725   4 digit - 314   3 digit
- 98   2 digit - 24   Super
Sector 11
12
Questions so far?
13
Employment by SIC 2001
14
Employment by NAICS 2001
15
(No Transcript)
16
Agriculture, Forestry,Fishing Hunting 11

• Changes to sector
• Moved in
• Logging
• Moved out
• Veterinarians
• Agricultural Research
• Horticultural and Landscape Activities

17
Utilities - 22

• Combination utilities no longer exist
• Examples of new electric power industries
• Fossil Fuel Electric Power
• Nuclear Electric Power
• Refuse systems
• Administrative Support, Waste Management,
  Remediation Services

18
Construction - 23

• Subsectors basically comparable to SIC major
  groups
• In the Construction of Buildings subsector,
  industry is based on whether construction is new
  or remodeling
• New Single Family Housing Construction
• New Housing Operative Builders
• Residential Remodelers

19
Manufacturing 31-33

• Reorganized and restructured comparability
  with Canada and Mexico
• 474 industries,
• 173 revised industries,
• 79 new industries
• New Computer and Electronic Products
  Manufacturing Subsector

20
Manufacturing 31-33

• Incoming
• Retail Bakeries
• Custom wood cabinets, furniture
• Dental Laboratories
• Tire Re-treading

• Outgoing
• Logging
• Publishing

21
Redefinition of Wholesale/Retail

• SIC based on class of customer
• NAICS based on method of selling
• Restaurants no longer included in retail

22
Wholesale Trade 42

• Three types of wholesalers
• Merchant Wholesalers
• Business-to-Business Electronic Markets
• Agents and Brokers
• Merchant wholesalers sell goods on their own
  account the other two do not
• Classification dependent on whether they take
  title to goods

23
Retail Trade 44 - 45

• New Industries
• Discount Department Stores
• Warehouse Clubs and Superstores
• Gasoline Stations with Convenience Stores
• Electronic Shopping

• Going Elsewhere
• Eating and Drinking Places
• Retail Bakeries

24
Transportation Warehousing 48 - 49

• Trucking no longer distinguished by whether or
  not storage is provided
• General Freight Trucking, Long Distance,
  Truckload
• General Freight Trucking, Long-Distance, Less
  Than Truckload
• No distinction between land and air couriers
• Waste collection and travel agencies
• Admin/Support Waste Management Remediation
  Services

25
Information Sector 51

• New Industries - Cellular and other Wireless
  Telecommunications - Telecommunications
  Resellers - Internet Publishing and Broadcasting
  - Internet Service Providers - Web Search
  Portals

• Rest created fromManufacturing
  PublishingTCPU Broadcasting
  CommunicationsServices Motion Picture
  Sound Recording Information Services Data
  Processing Libraries

26
Restructuring of Finance Industries 52

• Recognizes rapid change and deregulation
• New industries include
• Credit Card Issuing
• Financial transactions Processing, Reserveand
  Clearinghouse Activities
• Investment Banking and Securities Dealing

27
Reorganization of Old Services Division

• NAICS
• Real Estate and Rental and Leasing
• Professional, Scientific, Technical Services
• Administrative and Support Waste Management and
  Remediation Services
• Educational Services
• Health Care and Social Assistance
• Arts, Entertainment and Recreation
• Accommodation and Food Services
• Other Services (except Public Admin)

1987 SIC Services
28
Professional, Scientific, Technical Services
54

• Grouped by expertise and training
• of service provider

• 28 new industries
• Offices of CPAs
• Interior Design Services
• Environmental Consulting
• Marketing Research Opinion Polling
• Consultants

29
Administrative Support Waste Management
Remediation 56

• 29 new industries
• Professional Employer Organizations
• Convention Visitors Bureaus
• Repossession Services
• Hazardous Waste Collection

Industries that support businesses
30
Health Care and Social Assistance 62

• 27 new industries not found under the SIC
• HMO Medical Centers
• Diagnostic Imaging Centers
• Blood and Organ Banks
• Residential Mental Health and Substance Abuse
  Facilities
• Continuing Care Retirement Facilities

31
Accommodation and Food Services 72

• New lodging industries
• Casino Hotels
• Bed-and-Breakfast Inns

• New eating place industries
• Full-Service Restaurants
• Limited-Service Restaurants
• Cafeterias
• Food Service Contractors

32
Public Administration 92

• Tribal government added
• A governmental and a private unit will have the
  same NAICS code if they perform the same activity
  
• - Air Traffic Control is 488111

33
NAICS U.S. Manual

• Published in 1998
• 1170 descriptions
• Contains Bridge NAICS/SIC tables
• Approximately 12,000 index items in an
  alphabetic sequence

• ALREADY OBSOLETE NAICS 1997
• Replacement published in 2002

34
NAICS 2002
NAICS 2002 is the first five-year revision
to NAICS 1997

• Revision was effective January 1, 2002
• Final Federal Register notice January 16, 2001
• Goals of the revision
• Increase comparability among the three countries
• Identify new and emerging industries
• Restructure Wholesale Trade (US only)

35
NAICS 2002

• Industries impacted by NAICS 2002
• Construction International comparability at
  fifth digit, and (BLS only) residential/nonresi
  dential distinction at sixth digit
• Wholesale Trade
• Department Stores
• Electronic shopping and auctions
• Information

• Next revision 2007
• Complete restructuring of distribution
  network industries Wholesale, Retail,
  Transportation and Warehousing

36
Implementation Timing Across Agencies

• Phase in by statistical agencies
• Completion of implementation by 2005

37
NAICS Implementation Schedule
U.S. Statistical Agencies

• Internal Revenue Service
• Census Bureau
• Bureau of Economic Analysis
• Bureau of Labor Statistics

• Tax Year 1998
• 1999 - 2002
• 1999 - 2004
• 2002 - 2005

38
Implementation at BLS (employment)
39
Implementation at BLS (non-employment)
40
Covered Employment Wages(ES-202)

• ES-202 is cornerstone employment program

• Universe for virtually all BLS programs
• Very detailed coverage 8.2 million
  establishments, data aggregated by
  ownership/county/NAICS
• Codes continually verified on a three-year cycle
• 1998-2000 States polled companies to
  determineNAICS 1997 code (while still verifying
  SIC)

41
Covered Employment Wages(ES-202)

• 2001 Recoded for NAICS 2002

• Will continue to dual-code SIC and NAICS New
  units Through FY 2002 (September 30,
  2002) Existing units Will maintain but not
  update SIC
• Publication by BLS When December 2001 MLR
  articles, full pub. in 2002 What Data for
  2001 and SIC/NAICS ratio tables
• Historical reconstruction by BLS? Undecided

42
More information

• http//www.census.gov/epcd/www/naics.html

43
To find NAICS Codes

• http//www.census.gov/epcd/naics02/naicsod02.htm

44
Order a copy of the 2002 NAICS Manual

• Call 800-553-6847 or go to
• http//www.ntis.gov
• Now Available - 2002 Hardcover print edition!
  45 PB2002-101430
• CD-ROM with search and retrieval software
• 60 PB2002-502024

45
Questions?
46
BREAK
47
OccupationalEmploymentStatistics

• The difference betweenOccupations and Industry

48
Occupation

• Standard Occupational Classification (SOC)
• System for classifying all occupations in the
  economy
• Used by all Federal statistical agencies
  collecting occupational data
• Classifies workers (employees) by the job tasks
  performed

49
Industry

• OES surveys provide occupations by industry
• Snapshot of the type of work performed within
  an industry

50
Top 10 Construction Occupations
By Employment
51
Top 10 Construction Occupations
By Wage
52
How NAICS affects OES

• Break in time series
• Staffing patterns will not be comparable!
• Provide occupations for new emerging industries
  i.e. Information sector of NAICS
• More forms! (Because of more industry sectors)

53
Projections

• Current Industry Projections based on SIC codes
• With NAICS, next industry projections may not be
  based on a full three years worth of data
• Occupation projections are still possible because
  the occupation coding will not change

54
Questions?
55
CurrentEmploymentStatistics (CES)
56
Current Employment Statistics (CES)

• CES more commonly used time series

• Decreased risk of confidentiality disclosurewith
  higher level of aggregation forpublication
• Data for all 20 sectors are available for the
  statewide but not the area series

57
Current Employment Statistics (CES)

• Maintain continuity at Total Nonfarm level
• Retain logging, despite reclassification to
  agricultureDrop animal production support (part
  of SIC 075)

• Publication by BLS and states Two-year
  benchmark from January 2001 through December
  2002 State Area March 2003
  National June 2003

58
Current Employment Statistics (CES)
Time series reconstruction

• State Area 1939 - current for
  Total Nonfarm
• 1990 - 2000 for All Employee series
  2001 2002 All Employee Benchmark
• 2003 January all estimates done in NAICS
• NO Hours Earnings reconstruction
• Will start January 2003 by estimation
• NAICS based historical reconstruction
  at http//data.bls.gov/labjava/outside.jsp?survey
  sm

59
SUPERSECTORS

• Collections of sectors similar to SIC divisions.
• Statewide data is seasonally adjusted at the
  Supersector level.
• Written analysis on Supersector data for
  Statewide and Denver MSA.
• Statewide Supersector data has been reconstructed
  by BLS back to 1990.
• Links to the data reconstruction on CES homepage.

60
Supersector DetailGoods Producing

• Natural Resources and Mining
• Sector 11 (Agriculture, forestry,
  fishing and hunting)
• Sector 21 (Mining)
• Construction
• Sector 23 (Construction)
• Manufacturing
• Sectors 31-33 (Manufacturing)

61
Service Producing

• Trade, Transportation, and Utilities
• Sector 42 (Wholesale trade)
• Sector 44-45 (Retail trade)
• Sector 48-49 (Transportation and warehousing)
• Sector 22 (Utilities)

62
Service Producing

• Information
• Sector 51 (Information)
• Financial Activities
• Sector 52 (Finance and insurance)
• Sector 53 (Real estate and rental and leasing)

63
Service Producing

• Professional and Business Services
• Sector 54 (Professional, scientific, and
  technical services)
• Sector 55 (Management of companies and
  enterprises)
• Sector 56 (Administrative and support and
  waste management and remediation
  services)

64
Service Producing

• Education and Health Services
• Sector 61 (Educational services)
• Sector 62 (Health care and social
  assistance)
• Leisure and Hospitality
• Sector 71 (Arts, entertainment, and
  recreation)
• Sector 72 (Accommodation and food
  services)

65
Supersector Employment
SIC
NAICS
66
Changes To Statewide CES Published Data

• Employment level estimates reported in industry
  category cells.
• Published government cells will not change.
• Non-governmental cells at statewide level will
  increase from 67 SIC to 80 NAICS.
• Some loss of detail in
• Mining
• Manufacturing
• Retail trade.

67
Changes To Statewide CES Published Data

• Offset by a considerable increase of detail in
  SIC industries classified now under NAICS
  Services, TCU and FIRE.
• New industry classifications regain the loss of
  detail from Manufacturing and Retail Trade.

68
Supersector by Supersector comparison CES
published data differences SIC to NAICS.
All graphs are employment in thousands.
69
Natural Resources and Mining
NAICS
SIC
70
Natural Resources and Mining

• SIC Mining Mfg. Logging firms Natural
  Resources Mining Supersector.
• Loss of Detail from SIC
• Metal Mining
• Coal Mining
• Oil and Gas Extraction
• Natural Resources and Mining NAICS 10-000000
• NAICS Supersector only.

71
Construction
NAICS
SIC
72
Construction

• New detail
• 3 SIC to 6 NAICS
• Detail from SIC
• General Building Contractors
• Heavy Construction, Exc. Building
• Special Trade Contractors

73
Construction

• New detail from NAICS 20-000000
• Construction of Buildings 20-236000
• Heavy and Civil Engineering Construction
  20-237000

74
Construction
New detail

• Specialty Trade Contractors 20-238000
• Foundation, Structure, and Building Exterior
  Contractors 20-238100
• Building Equipment Contractors20-238200
• Building Finishing Contractors20-238300

75
Manufacturing
NAICS
SIC
76
Manufacturing

• NAICS 30-000000 change of detail
• Durable goods detail in from SIC
• Lumber Wood Production Including Furniture
• Stone, Clay, Glass Products
• Primary, Fabricated Metal Products
• Computer Office Equipment Instruments Related
  Product

77
Manufacturing

• Durable, new detail from NAICS 31-000000
• Nonmetallic Mineral Product Manufacture
• 31-327000
• Fabricated Metal Product Manufacture
• 31-332000
• Computer and Electronic Product Manufacture
  31-334000
• Transportation Equipment Manufacture 31-336000

78
Manufacturing

• Non-Durable Goods loss of detail from SIC
• Food and Kindred Products
• Meat Products
• Dairy Products
• Beverages
• Textiles, Apparel Leather Products
• Paper Allied Products
• Printing and Publishing (splits between
  Non-durableand new Information)
• Chemicals, Petroleum Coal Products

79
Manufacturing
Non-Durable new detail from NAICS 32-000000 (5
fewer categories)

• Food manufacturing 32-311000
• Beverage Manufacturing 32-312000
• Printing and Related Support Activities
  32-323000 (Publishing is now in Information)

80
Trade, Transportation Utilities / Information
81
Trade, Transportation Utilities / Information

• TCU and Trade is a new aggregation.
• Major changes with higher detail.
• Communication
• Supersector Information.

82
Trade, Transportation Utilities / Information

• TCU, SIC detail
• Trucking and Warehousing
• Transportation by Air
• Communications Information
• Electric, Gas Sanitary Services

83
Trade, Transportation Utilities / Information

• Transportation, Warehousing and Utilities
• New detail in NAICS 40-000000
• Utilities 22
• Transportation and Warehousing 48-49
• Air Transportation 481
• Truck Transportation 484
• Couriers and Messengers 492
• Warehousing and Storage 493

84
Trade, Transportation Utilities / Information

• Wholesale Trade
• same detail level in NAICS and SIC.
• Trade
• change of detail in Retail
• some split-off from Retail into new NAICS
  industries.

85
Trade, Transportation Utilities / Information

• Wholesale Trade
• SIC detail
• Durable goods
• Non-Durable goods

86
Trade, Transportation Utilities / Information

• Wholesale Trade
• NAICS 41-000000 detail
• Merchant Wholesalers, Durable Goods41-423000
• Merchant Wholesalers, Non-Durable Goods 41-424000

87
Trade, Transportation Utilities / Information

• Retail Trade in SIC
• Building Materials, Garden Supply Stores
• General Merchandise Stores
• Food Stores
• Automotive Dealers Service Stations
• Apparel Accessory Stores
• Home Furnishings Equipment Stores
• Eating Drinking Places

NAICS Leisure and Hospitality
88
Trade, Transportation Utilities / Information

• Retail Trade, NAICS 42-000000 detail
• Motor Vehicle and Parts Dealers 42-441000
• Building Material and Garden Equipment and
  Supplies Dealers 42-444000
• Food and Beverage Stores 42-445000
• General Merchandise Stores 42-452000

89
Trade, Transportation Utilities / Information

• Information 50-000000
• New industry
• Communications from TCU
• Publishing from the SIC Non-Durable Goods
  Industry at greater detail.

90
Trade, Transportation Utilities / Information

• NAICS detail
• Publishing Industries (except internet) 50-511000
• Newspaper, Periodical, Book, and Directory
  Publishers 50-511100
• Software Publishers 50-511200
• Telecommunications 50-517000

91
Financial Activities
NAICS
SIC
92
Financial Activities

• FIRE greater detail in NAICS Financial
  Activities.
• SIC detail

• Depository Institutions
• Insurance
• Real Estate

93
Financial Activities

• Financial Activities, NAICS 55-000000 detail
• Finance and Insurance 55-520000
• Credit Intermediation and Related Activities
  55-522000
• Securities, Commodity Contracts, and Other
  Financial Investments and Related Activities
  55-523000
• Insurance Carriers and Related Activities
  52-524000
• Real Estate and Rental and Leasing
• 55530000
• Real Estate 55-531000

94
Services
95
Services

• Greatest changes and additional detail!
• Services will split into 4 Supersectors.
• under SIC 17 CES detail cells
• under NAICS 28 detail cells.

96
Services - SIC

• Services SIC detail
• Hotels Other Lodging Places
• Personal Services
• Business Services
• Computer Data Processing Services
• Motion Pictures
• Amusements Recreation Services

97
Services - SIC

• Services SIC detail (cont.)
• Ski Lift Operators Leisure Hospitality
• Health Services
• Hospitals
• MDs and Other Health Care Practitioners
• Nursing Facilities Home Health Care
• Legal Services

98
Services - SIC

• Services SIC detail, cont
• Educational Services
• Social Services
• Membership Organizations
• Engineering Management Services
• Agricultural Services

99
Services - NAICS

• PROFESSIONAL AND BUSINESS SERVICES 60-000000

100
Professional And Business Services 60-000000
Services - NAICS

•  
• Professional, Scientific and Technical Services
  60-540000
• Legal Services 60-541100
• Architectural, Engineering and Related Services
  60-541300
• Computer Systems Design and Related Services
  60-541500

101
Professional And Business Services 60-000000
Services - NAICS

• Management of Companies and Enterprises 60-550000
• Administrative and Support and Waste Management
  and Remediation Services 60-560000
• Administrative and Support Services 60-561000
• Employment Services 60561300
• Services to Buildings and Dwellings 60-561700

102
Services - NAICS

• EDUCATION AND HEALTH SERVICES 65-000000

103
EDUCATION AND HEALTH SERVICES 65-000000
Services - NAICS

• Educational Services 65-610000
• Health Care and Social Assistance 65-620000
• Ambulatory Health Care Services 65-621000
• Hospitals 65-622000
• Nursing and Residential Care Facilities
  65-623000
• Social Assistance 65-624000

104
Services - NAICS

• LEISURE AND HOSPITALITY
• 70-000000

105
LEISURE AND HOSPITALITY 70-000000
Services - NAICS

• Arts, Entertainment, and Recreation
• 70-710000
• Amusement, Gambling, and Recreation Industries
  70-713000
• Other Amusement and Recreation Industries
  70-713900 (contains the Ski industry)

106
Services - NAICS

• ACCOMMODATION
• AND FOOD SERVICES 70-000000 

107
ACCOMMODATION AND FOOD SERVICES 70-720000
Services - NAICS

• Accommodation 70-721000
• Food Services and Drinking Places 70-722000
  (formerly in Retail Trade)

108
Services - NAICS
OTHER SERVICES 80-000000
109
OTHER SERVICES80-000000
Services - NAICS

• Repair and Maintenance 80-811000
• Personal and Laundry Services 80-812000
• Religious, Grantmaking, Civic, Professional, and
  Similar Organizations 80-813000
• Religious Organizations 80-813100

110
Denver, Boulder,Colorado Springs MSAs

• Denver 55 SIC non-government cells replaced by
  64 NAICS cells .
• Boulder 16 SIC non-government cells expanded to
  23 NAICS cells.
• Colorado Springs 18 SIC non-government cells
  expanded to 29 NAICS cells.

111
New Broomfield County In Denver MSA

• January 2003 Denver MSA has 6 counties.
• Broomfield adds 20,800 positions to Denver MSA
  from Boulder MSA.
• This change breaks series in both MSAs.

112
Changes to Denver and Colorado Springs MSAs in
2005

• Denver MSA adds Clear Creek, Elbert, Gilpin, and
  Park Counties. This is an additional 1,511
  businesses and 13,568 employment.
• Colorado Springs MSA adds Teller County. This
  adds 674 establishments and 6,598 employees.

113
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• QUESTIONS?