Presentation is loading. Please wait.

Presentation is loading. Please wait.

TM NAICS Understanding NAICS: The North American Industry Classification System November 2002 Research and Analysis Bureau Nevada Dept. of Employment,

Similar presentations


Presentation on theme: "TM NAICS Understanding NAICS: The North American Industry Classification System November 2002 Research and Analysis Bureau Nevada Dept. of Employment,"— Presentation transcript:

1 TM NAICS Understanding NAICS: The North American Industry Classification System November 2002 Research and Analysis Bureau Nevada Dept. of Employment, Training, and Rehabilitation

2 Agenda What is NAICS and Why? Identify NAICS Sectors Compare to SIC Industries Define NAICS Sectors and Industries New Auxiliary Treatment Implementation Schedule Historical Data Reconstruction: Covered Employment and Wages (ES-202) vs. CES CES Industry Detail for Publication NAICS

3 What is NAICS? Concept: Group establishments by similar production processes Established in 1997 Developed in cooperation with our NAFTA partners, Canada and Mexico New Industry Classification System to replace SIC codes

4 Why Develop NAICS? The 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

5 20 sectors (21 counting Unclassified) 1,179 industries (US) 175 more than under SIC system 6-digit numbering system What is the NAICS Structure?

6 How Does NAICS Differ from SIC? Emphasizes new and emerging industries, high-technology industries, and service industries Provides greater industry detail (6-digit vs. 4-digit), especially in the services sectors Provides for comparability with Canada and Mexico Will be regularly maintained. Current plans are for revisions every 5 years: 2002, 2007, etc.

7 How Does NAICS Differ from SIC? The “Production Function” concept means that businesses should be grouped together based on: Production of similar products or Use of similar production processes i.e., based on How, not What (produced, sold, serviced)….… usually Based on the “Production Function” concept -

8 How Does NAICS Differ from SIC? Examples of applying the “Production Function” concept include: SIC 49 included Combined Generation, Transmission, and Distribution of Gas NAICS separates Generation & Distribution of Gas (still in Utilities) from Transmission (to Transportation) –because Transmission of Gas utilizes different processes than generation and distribution

9 How Does NAICS Differ from SIC? Other Examples of “Production Function”: Wholesale Trade now distinguishes Agents and Brokers separately from Merchant Wholesalers Agents and Brokers are coded based on: –HOW they sell (i.e., no inventory of merchandise) –No longer based on WHAT they sell (as it did in SIC)

10 How Does NAICS Differ from SIC? Other Examples of “Production Function”: Pawn Shops were included in SIC 5932, Used Merchandise Stores NAICS includes Pawn Shops in All Other Nondepository Credit Intermediation, (i.e., now included in consumer cash lending). NAICS identifies the true business activity of Pawn Shops is to provide cash, not the incidental sales of merchandise.

11 NAICS vs. SIC Structure NAICS 12 Super Sectors combinations 2-digit Sector 3-digit Subsector 4-digit Industry Group 5-digit NAICS Industry 6-digit U.S. Industry SIC 1-digit Division 2-digit Major Group 3-digit Industry Group 4-digit Industry

12 NAICS SUPERSECTORS & SECTORS "Total"2 clusters12 groups (Super Sectors)21 sectors North AmericanGoods-ProducingNatural Resources and Mining11 - Agriculture, Forestry, Fishing & Hunting Economy21 - Mining Construction23 - Construction Manufacturing31/33 - Manufacturing Service-ProducingTrade, Transportation & Utilities42 - Wholesale Trade 44/45 - Retail Trade 48/49 - Transportation and Warehousing 22 - Utilities Information51 - Information Financial Activities52 - Finance and Insurance 53 - Real Estate and Rental and Leasing Professional & Business Services54 - Professional, Scientific & Technical Services 55 - Management of Companies & Enterprises 56 - Administrative & Support & Waste Mgmt & Remediation Services Education and Health Services61 - Educational Services 62 - Health Care and Social Assistance Leisure and Hospitality71 - Arts, Entertainment, and Recreation 72 - Accommodation and Food Services Other Services81 - Other Services (except Public Admin) Public Administration92 - Public Administration Unclassified99 - Unclassified

13 NAICS vs. SIC Codes Agriculture, Forestry, Fishing, & Hunting Mining Construction Manufacturing Wholesale Trade Retail Trade Transportation & Warehousing Utilities Information Logging moves in from Mfg, Vets, Landscaping move out Geophysical surveying out Mgt & Land Developers in Printing and Publishing out How they sell, not what Restaurants out Warehousing growth due to Auxiliaries Excludes Waste Disposal New Industry from Publishing, Communications

14 NAICS vs. SIC Codes Finance & Insurance Real Estate and Rental & Leasing Professional, Scientific & Technical Services Management of Companies & Enterprises Administrative & Support and Waste Management Pawn Shops in Any type of rental in New industry from SIC Services New industry New industry from Business Svcs, plus Waste/Garbage

15 NAICS vs. SIC Codes Educational Services Health Care & Social Assistance Arts, Entertainment & Recreation Accommodation & Food Services Other Services Government Expanded definitions More specialized industries Includes Casinos Only New sector of Casino- Hotels Restaurants now here Fewer industries here now Tribal governments added in 2001

16 11 Agriculture, Forestry, Fishing and Hunting: Landscaping Services moved 21 Mining 22 Utilities: Waste Management moved 23 Construction Manufacturing 42 Wholesale Trade Retail Trade: Restaurants moved Transportation and Warehousing 51 Information: Combines SIC 48, Communications, with Publishers 52 Finance and Insurance NAICS Sectors

17 53 Real Estate and Rental & Leasing: Rental/Leasing added 54 Professional, Scientific & Technical Services: From SIC 73, Business Services 55 Management of Companies and Enterprises: New industry 56 Administrative & Support and Waste Management & Remediation Services: From SIC 73, Business Services and S IC 49, Refuse Systems 61 Educational Services: From SIC 82, Education and SIC 73, Business Services 62 Health Care & Social Assistance NAICS Sectors (cont’d)

18 71 Arts, Entertainment, & Recreation: From SIC 79, Amusement & Recreation 72 Accommodation & Food Services: From SIC 70, Hotels-Motels, and SIC 58, Eating & Drinking Places 81 Other Services (except public administration) 92 Public Administration 99 Unclassified NAICS Sectors (cont’d)

19 NAICS Structure Code Title Accommodation & Food Service Accommodation Traveler Accommodation Hotels (except Casino Hotels) & Motels Casino Hotels As with SIC, more digits = more detail

20 NAICS Structure Casino Hotels now separate from Hotels/Motels Separate definitions for Full Service and Fast Food Restaurants Corporate Headquarters / Regional Offices / Management a new industry Major Improvements for Nevada:

21 NAICS Structure Warehousing industry better defined due to change in treatment of Auxiliaries Pawn shops move from Used Merchandise Stores to Finance ( All Other Nondepository Credit Intermeditation) Nine new Service Sectors created from SIC 70-89, Services Major Improvements for Nevada:

22 NAICS Structure Employee Leasing and Temporary Help Services now identified separately Telephone Call Centers (Telemarketing) Travel Arrangement and Reservation Services Convention and Trade Show Organizers Improved ‘Business Service’ Definitions:

23 Classify Auxiliaries by Activity Auxiliaries will be classified by primary activity Under SIC, were classified according to the establishment they served Greatest impact in SIC-to-NAICS conversion: Manufacturing & Wholesale Trade Example of an auxiliary: Warehouse (separate location) for a manufacturing establishment Under NAICS, the warehouse will be classified in Warehousing and Storage, not Manufacturing or Wholesale Trade

24 Agriculture, Forestry, Fishing & Hunting Changes to sector: Moved in –Logging Moved out –Veterinarians (to 54- Other Professional, Scientific, and Technical Services) –Horticultural and Landscape Activities (to 56-Services to Buildings and Dwellings)

25 Construction Subsectors basically comparable to SIC major groups: Construction of Buildings - industry is based on whether construction is new or remodeling: –New Single Family Housing Construction –New Housing Operative Builders –Residential Remodelers Heavy and Civil Engineering Construction Specialty Trade

26 Construction (cont’d) Moved in Construction management services (from SIC 87, Management Services) Land Subdividers and Developers (from SIC 65, Real Estate) Construction Equipment Rental & Leasing (construction equipment with operator only)

27 Construction - Specialty Trade Contractors We now collect data at the 6-digit level to differentiate residential vs. nonresidential Example: – Residential Glass and Glazing Contractors – Nonresidential Glass and Glazing Contractors This will be done by the BLS only and will not be in the manual

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

29 Manufacturing Moving In: – Retail Bakeries – Custom wood cabinets, furniture – Dental Laboratories – Tire Retreading Moving Out: – Logging – Publishing Other impact of conversion from SIC: – Change in Auxiliary treatment

30 Redefinition of Wholesale/Retail SIC based on class of customer NAICS based on method of selling Restaurants no longer included in retail

31 Wholesale Trade Three types of wholesalers: Merchant Wholesalers –Operate a warehouse/take possession of goods –Also known as Drop Shippers, Import/Export Merchants, Distributors, Jobbers –Sell goods on their own account

32 Wholesale Trade Three types of wholesalers: Merchant Wholesalers –Operate a warehouse/take possession of goods –Also known as Drop Shippers, Import/Export Merchants, Distributors, Jobbers Business-to-Business Electronic Markets -Sell ONLY via internet, no brick & mortar location OR -Have brick & mortar location separate from internet location, and report data on both locations

33 Wholesale Trade Three types of wholesalers: Merchant Wholesalers –Operate a warehouse/take possession of goods –Also known as Drop Shippers, Import/Export Merchants, Distributors, Jobbers Business-to-Business Electronic Markets (internet) Agents and Brokers –Do not take possession of goods –Also known as Manufacturers’ Representatives

34 Wholesale Trade Three types of wholesalers: Merchant Wholesalers –Operate a warehouse/take possession of goods –Also known as Drop Shippers, Import/Export Merchants, Distributors, Jobbers Business-to-Business Electronic Markets (internet) Agents and Brokers –Do not take possession of goods –Also known as Manufacturers’ Representatives Merchant wholesalers sell goods on their own account, while the other two do not

35 Wholesale Trade NAICS based on method of selling: Typically operate from a warehouse Provide little or no display of merchandise

36 Wholesale Trade NAICS based on method of selling: Typically operate from a warehouse Provide little or no display of merchandise Do not normally advertise to general public

37 Wholesale Trade NAICS based on method of selling: Typically operate from a warehouse Provide little or no display of merchandise Do not normally advertise to general public Normally denotes sales in large volumes, exceptions include durable nonconsumer goods (machinery)

38 Wholesale Trade NAICS based on method of selling: Typically operate from a warehouse Provide little or no display of merchandise Do not normally advertise to general public Normally denotes sales in large volumes, exceptions include durable nonconsumer goods (machinery) Some goods always in Wholesale include: Farm machinery, Medium & Heavy duty Trucks, Industrial Machinery

39 Retail Trade New Industries –Discount Department Stores –Warehouse Clubs and Superstores –Gasoline Stations with Convenience Stores –Electronic Shopping

40 Retail Trade New Industries –Discount Department Stores –Warehouse Clubs and Superstores –Gasoline Stations with Convenience Stores –Electronic Shopping Moving Out: –Eating and Drinking Places (EMP= -70,000) –Retail Bakeries

41 Transportation & Warehousing 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 move to Admin/Support and Waste Management & Remediation Services

42 Utilities Combination utilities no longer exist (provide gas and electric or other services) Examples of new electric power industries –Fossil Fuel Electric Power –Nuclear Electric Power Moved out –Refuse systems (garbage collection) moves to: Administrative & Support, Waste Management, & Remediation Services

43 Information Sector New Industries: - Cellular and other Wireless Telecommunications - Telecommunications Resellers - Internet Publishing and Broadcasting - Internet Service Providers - Web Search Portals Rest created from: Manufacturing: Publishing TCPU: Broadcasting & Communications (Television, Radio, Satellite) Services: Motion Picture & Sound Recording Information Services & Data Processing Libraries

44 Restructuring of Finance Industries Recognizes rapid change and deregulation Recognizes differences in countries’ financial industries structures Agreement with Mexico at 3- and 4-digit level Agreement with Canada at 5-digit level New industries include: –Credit Card Issuing –Financial transactions Processing, Reserve and Clearinghouse Activities –Investment Banking and Securities Dealing

45 Reorganization of Old “Services” Division 1987 SIC - Services 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)

46 Professional, Scientific, & Technical Services Grouped by expertise and training of service provider 28 new industries –Offices of CPAs –Interior Design Services –Environmental Consulting –Marketing Research & Opinion Polling

47 Administrative & Support and Waste Management & Remediation Industries that support businesses 29 new industries –Professional Employer Organizations –Convention & Visitors Bureaus –Repossession Services –Hazardous Waste Collection

48 Health Care and Social Assistance 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

49 Arts, Entertainment, and Recreation Comparable to SIC 79, Recreation –Includes Casinos only (not Casino- Hotels) and Slot Route Operators Also includes: –Independent Writers, Musicians –Golf Courses –Amusement Parks –Museums –Gymansiums

50 Accommodation and Food Services New lodging industries –Casino Hotels –Bed-and-Breakfast Inns New eating place industries –Full-Service Restaurants –Limited-Service Restaurants –Cafeterias –Food Service Contractors

51 Public Administration Tribal government added in 2001 Note: A governmental and a private unit will have the same NAICS code if they perform the same activity - Air Traffic Control is

52 NAICS 2002 Industries impacted by NAICS 2002: -Construction International comparability at fifth digit, and (BLS only) residential/nonresidential distinction at sixth digit -Wholesale Trade -Department Stores -Electronic shopping and auctions -Information Next revision: Complete restructuring of “distribution network” industries: Wholesale, Retail, Transportation and Warehousing

53 Implementation Timing Across Agencies Phase in by statistical agencies Completion of implementation by 2005

54 NAICS Implementation Schedule Internal Revenue Service Census Bureau Bureau of Economic Analysis Bureau of Labor Statistics Tax Year U.S. Statistical Agencies

55 Covered Employment & Wages (ES-202) Universe for virtually all BLS programs Very detailed coverage: - all employers in NV covered by UI laws - by ownership/county/6-digit SIC Codes continually verified on a three-year cycle Historical firm-level data back to 1990: –Sector levels must be computed –Not yet validated by NV staff ES-202 is cornerstone employment program

56 Covered Employment & Wages (ES-202) Data Availability: –First Qtr 2002 data by NAICS and SIC –Second Qtr 2002 data by NAICS only –Quarterly publication of data now required, beginning with Second Qtr 2002 data (via website)

57 Current Employment Statistics (CES) Decreased risk of confidentiality disclosure with higher level of aggregation for publication Data for all 20 sectors will not be available for all state & area series Minimum publication will be “Expanded” Super Sector (Wholesale, Retail, Transportation & Utilities pub. separately)

58 Current Employment Statistics (CES) Publication by BLS and states Two-year benchmark from January 2001 through December 2002 State & Area: March 2003 National: June 2003 Maintain continuity at “Total Nonfarm” level Retain logging, despite reclassification to agriculture Drop animal production support (part of SIC 075)

59 Current Employment Statistics (CES) State & Area – current for Total Nonfarm – for All Employee series –Validated and corrected by NV staff –NO Hours & Earnings reconstruction, H&E will start as of January 2001 National (Employment and H&E) – for “Super Sector” – minimum for detail Time series reconstruction:

60 Breaks in Time Series - CES Effect on series depends upon level of aggregation CES Preliminary Research: 4-digit SIC level75% will convert directly 3-digit SIC level50% will convert 2-digit SIC level25% will convert Expect LOTS of breaks in series

61 More information Clarification memos at:

62 SUMMARY NAICS is HERE NAICS offers 20 industry sectors NAICS offers new industries: - Information - Professional/Scientific/Technical Svcs - Management of Companies - Administrative & Support/Waste Mgt - Accommodation & Food Services and more detail NAICS

63 SUMMARY New NAICS terminology: - Super Sectors (industry groups) - Sectors (2-digit) - Industries (6-digit) New Auxiliary Treatment affects employment levels (ex: warehousing) Covered Employment and Wage (ES-202) data available now by NAICS Monthly Current Employment Statistics (CES) by NAICS with Jan data NAICS

64 SUMMARY Historical data available for Current Employment Statistics (CES) by NAICS from Jan NAICS

65 CONCLUSION The learning curve for NAICS is slow…… and sometimes painful Be patient Good Luck NAICS


Download ppt "TM NAICS Understanding NAICS: The North American Industry Classification System November 2002 Research and Analysis Bureau Nevada Dept. of Employment,"

Similar presentations


Ads by Google