OFFICE OF MANAGEMENT AND BUDGET 1997 North American Industry…

OFFICE OF MANAGEMENT AND BUDGET

1997 North American Industry Classification System -- 1987 Standard Industrial
Classification Replacement

AGENCY:        Office of Management and Budget, Executive Office of the President.

ACTION:        Notice of Update to the North American Industry Classification System (NAICS).

SUMMARY: This notice updates the structure and the concordance tables of the North
American Industry Classification System (NAICS) that were published by the Office of
Management and Budget in an April 9, 1997, Federal Register notice and announces the
availability of the official U.S. reference manual for implementing NAICS United States in both
printed and electronic versions from the National Technical Information Service.. This update is
the result of numerous meetings among Canada, Mexico, and the United States that were held to
complete the written descriptions for NAICS and assign a list of 35,000 activity items to the
correct NAICS industry. The assignment of the activity items resulted in some changes to the
NAICS tables as published in the April 9, 1997, Federal Register notice. These changes are
highlighted in the Supplementary Information section of the notice.

         NAICS is a new economic classification system that replaces the 1987 Standard Industrial
Classification (SIC) for statistical purposes. NAICS is a system for classifying establishments by
type of economic activity. Its purposes are: (1) to facilitate the collection, tabulation,
presentation, and analysis of data relating to establishments, and (2) to promote uniformity and
comparability in the presentation and analysis of statistical data describing the economy. NAICS
will be used by Federal statistical agencies that collect or publish data by industry. It is also
expected to be widely used by State agencies, trade associations, private businesses, and other
organizations.

         The Instituto Nacional de Estadística, Geografía e Informatíca (INEGI) of Mexico,
Statistics Canada, and the United States Office of Management and Budget (OMB), through its
Economic Classification Policy Committee (ECPC), have collaborated on NAICS to make the
industrial statistics produced in the three countries comparable. NAICS is the first industry
classification system developed in accordance with a single principle of aggregation, the principle
that producing units that use similar production processes should be grouped together in the
classification. The fresh view of establishment data that this restructuring will provide should
engender insights into the increasingly interrelated evolution of our economies. NAICS also
reflects in a much more explicit way the enormous changes in technology and in the growth and
diversification of services that have marked recent decades. Industry statistics presented using
NAICS will also be comparable with statistics compiled according to the latest revision of the
United Nations'International Standard Industrial Classification (ISIC, Revision 3) for some sixty
high-level groupings.

        For the three countries, NAICS will provide a consistent framework for the collection,
tabulation, presentation, and analysis of industrial statistics used by government policy analysts, by
academics and researchers, by the business community, and by the public. However, because of
differing national economic and institutional structures as well as limited resources and time for
constructing NAICS, the NAICS structure has not been made entirely comparable at the
individual industry level across all three countries. For some sectors and subsectors, the statistical
agencies of the three countries have agreed to harmonize NAICS based on sectoral boundaries
rather than on a detailed industry structure. The sectors that are not comparable at the detailed
industry level are: utilities; construction; wholesale trade; retail trade; finance and insurance; and
public administration. The subsectors that are not comparable at the detailed industry level are:
real estate; waste management and remediation services; as well as other services including
personal and laundry services, and religious, grantmaking, civic, and professional and similar
organizations. Separate agreements providing for detailed industry comparability between
Canada and the United States were reached for the utilities; retail trade; and finance and insurance
sectors. To distinguish the three countries'versions of NAICS, they are called NAICS Canada,
NAICS Mexico (SCIAN Mexico, in Spanish), and NAICS United States.

         In developing NAICS United States, OMB has published a total of eight previous
Federal Register notices advising the public of the work of the ECPC and seeking comment on
that work. The March 31, 1993, Federal Register notice (58 FR 16990-17004) announced
OMB' intention to revise the SIC for 1997, the establishment of the Economic Classification
       s
Policy Committee, and the process for revising the SIC. The July 26, 1994, Federal Register
notice (59 FR 38092-38096) set forth the concepts for the new system and the decision to
develop NAICS in cooperation with Statistics Canada and INEGI. That notice also included a
request for the public to submit recommendations for the industries to be included in the new
system. The deadline for submitting proposals for new or revised industries was November 7,
1994.

        After considering all proposals from the public, consulting with a large number of U.S.
data users and industry groups, and undertaking extensive discussions with INEGI and Statistics
Canada, an industrial structure that would apply to all three North American countries was
developed as NAICS. A series of five Federal Register notices sought comment on the structure
of the system. These notices are described in more detail in the SUPPLEMENTARY
INFORMATION section below. The last Federal Register notice, published on April 9, 1997,
announced OMB' decision to adopt NAICS and presented the final structure. This notice
                    s
adjusts that final structure as presented in the SUPPLEMENTARY INFORMATION section
below.

EFFECTIVE DATE: Federal statistical data published for reference years beginning on or after
January 1, 1997, will be published using the new NAICS United States codes as modified by this
notice. NAICS is scheduled to go into effect for Federal statistical purposes for reference year
1997 in Canada and the United States, and 1998 in Mexico. Publication of the 1997 NAICS
United States Manual is planned for June 1998. Use of NAICS for nonstatistical purposes (e.g.,
administrative, regulatory, or taxation) will be determined by the agency or agencies that have
chosen to use the SIC for nonstatistical purposes. Readers interested in the effective dates for the


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use of NAICS for nonstatistical
purposes should contact the relevant agency to determine its plans, if any, for a transition from
use of the SIC to NAICS.

ADDRESSES: Please send correspondence about these updates to: Katherine K. Wallman,
Chief Statistician, Office of Management and Budget, 10201 New Executive Office Building, 725
17th Street, NW, Washington, DC 20503, telephone number: (202) 395-3093, FAX number:
(202) 395-7245.

        Electronic Availability and Correspondence: This document is available on the Internet
from the Census Bureau Internet site via WWW browser, ftp, and E-mail. To obtain this
document via WWW browser, connect to "http://www.census.gov" then select "Subjects A to Z,"
then select "N," then select "NAICS (North American Industry Classification System)." This
WWW page contains previous NAICS United States Federal Register notices and related
documents as well.

         To obtain this document via ftp, log into ftp.census.gov as anonymous, and retrieve the
files "naicsfr9.pdf," "naicsfr9tbl1.pdf," and "naicsfr9tbl2.pdf" from the "/pub/epcd/naics"
directory. (That directory also contains previous NAICS United States Federal Register notices
and related documents.) To obtain this document via Internet E-mail, send a message to
majordomo@census.gov with the body text as follows: "get gatekeeper naics.txt". Instructions
for obtaining this and other NAICS United States documents will be delivered as a message
attachment.


        Correspondence may be sent via Internet E-mail to OMB at naics@a1.eop.gov (do not
include any capital letters in the address).

FOR FURTHER INFORMATION CONTACT: Paul Bugg, 10201 New Executive Office
Bldg., Washington, D.C. 20503, E-mail address: pbugg@omb.eop.gov, telephone number:
(202) 395-3093, FAX number: (202) 395-7245. Inquiries about the content of industries or
requests for electronic copies of the tables should be made to Carole Ambler, Chair, Economic
Classification Policy Committee, Bureau of the Census,
Room 2633-3, Washington, D.C. 20233, E-mail address: cambler@ccmail.census.gov, telephone
number: (301) 457-2668, FAX number: (301) 457-1343.

SUPPLEMENTARY INFORMATION:

NAICS Update

         The structure of NAICS was developed in a series of meetings among the three countries.
Public proposals for individual industries from all three countries were considered for acceptance
if the proposed industry was based on the production-oriented concept of NAICS.


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          As groups of subsectors of NAICS were completed and agreed upon by the three
countries, the ECPC published the proposed industries for those subsectors for public comment in
the Federal Register. Five successive Federal Register notices were published asking for
comment. A first notice published in the Federal Register, July 26, 1995 (60 FR 38436-38452),
requested comment on proposed industry structures for petroleum and coal product
manufacturing, chemical manufacturing, and rubber and plastics manufacturing; for broadcasting
and telecommunications; and for food services and drinking places and accommodations. A
second Federal Register notice published on February 6, 1996 (61 FR 4524-4578), requested
comment on proposed industry structures for crop production, animal production, forestry and
logging; textile mills, textile product mills, apparel manufacturing, and leather and allied product
manufacturing; food manufacturing and beverage and tobacco product manufacturing; fabricated
metal product manufacturing; machinery manufacturing; electrical equipment, appliance and
component manufacturing; and transportation equipment manufacturing. A third Federal
Register notice published on May 28, 1996 (61 FR 26558-26668), requested comment on
proposed industry structures for health and social assistance; educational services; computers and
electronics product manufacturing; furniture manufacturing; printing and related support
activities; professional, technical and scientific services; performing arts, spectator sports and
related industries; museums, historical sites and similar institutions; recreation, amusement and
gambling; information; wood product manufacturing, except furniture; rental and leasing; repair
and maintenance; management and support; transportation; mining; paper manufacturing;
nonmetallic minerals manufacturing; primary metal manufacturing; miscellaneous manufacturing;
and postal service and couriers. A fourth Federal Register notice published on July 5, 1996 (61
FR 35384-35515), requested comment on proposed industry structures for finance and insurance;
wholesale trade; retail trade; construction; utilities; waste management and remediation services;
real estate; lessors of other nonfinancial assets; personal and laundry services; and religious, grant
making, civic, and other membership organizations. That notice also requested comments on the
proposed hierarchy and coding system for NAICS. Finally, a fifth Federal Register notice
published on November 5, 1996 (61 FR 57006-57183), announced the ECPC' final       s
recommendations to OMB for the complete structure of NAICS United States, including the
hierarchy and coding system, and asked for public comments. Final comments were due on
December 20, 1996. Changes incorporated into the new system based on comments in response
to the November 5, 1996, notice were presented in a sixth Federal Register notice containing
OMB' final decisions, published on April 9, 1997 (62 FR 17288-17478).
        s


         Based on continuing meetings with Canada and Mexico, some changes have been made to
the NAICS structure that was published in the April 9, 1997, Federal Register notice. Most of
these changes are the result of an intensive review of 35,000 activity items compiled by the
statistical agencies of the three countries. As a result of that review, both the structure of NAICS
and some subsector and industry titles have been changed to better describe the activity or to
ensure that the titles among the three countries are comparable. In a few cases, activity items
have been moved from one NAICS code (as published in the April 9, 1997, Federal Register
notice) to another. The title changes and structural changes are shown below. Complete links


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between the 1997 NAICS and the 1987 SIC incorporating these changes are now shown in tables
that are available on the Census Bureau NAICS web site at
.

Title Changes:

NAICS             Original Title                                   New Title
Code

2123      Non-Metallic Mineral Mining and                    Nonmetallic Mineral Mining and Quarrying
          Quarrying
21239     Other Non-Metallic Mineral Mining        Other Nonmetallic Mineral Mining and Quarrying
          and Quarrying
212399    All Other Non-Metallic Mineral Mining    All Other Nonmetallic Mineral Mining
213115    Support Activities for Non-Metallic      Support Activities for Nonmetallic Minerals (except
          Minerals (except Fuels)                  Fuels)
311813    Frozen Bakery Product Manufacturing      Frozen Cakes, Pies, and Other Pastries Manufacturing
311823    Pasta Manufacturing                      Dry Pasta Manufacturing
315212    Women' and Girls' Cut and Sew
                   s                               Women' Girls' and Infants' Cut and Sew Apparel
                                                            s,      ,
           Apparel Contractors                     Contractors
32513     Dye and Pigment Manufacturing            Synthetic Dye and Pigment Manufacturing
325132    Organic Dye and Pigment Manufacturing Synthetic Organic Dye and Pigment Manufacturing
3255      Paint, Coating, Adhesive and Sealant     Paint, Coating, and Adhesive Manufacturing
          Manufacturing
32599     All Other Chemical Product Manufacturing All Other Chemical Product and Preparation Manufacturing
325998    All Other Miscellaneous Chemical Product All Other Miscellaneous Chemical Product
           Manufacturing                           and Preparation Manufacturing
327111    Vitreous China Plumbing Fixture and      Vitreous China Plumbing Fixtures and China and
          China Earthenware Fittings and           Earthenware Bathroom Accessories Manufacturing
          Bathroom Accessories Manufacturing
3274      Lime, Gypsum and Gypsum Product          Lime and Gypsum Product Manufacturing
          Manufacturing
32742     Gypsum and Gypsum Product                Gypsum Product Manufacturing
          Manufacturing
33149     Nonferrous Metals (except Copper and     Nonferrous Metal (except Copper and Aluminum)
          Aluminum) Rolling, Drawing,              Rolling, Drawing, Extruding, and Alloying
          Extruding, and Alloying
331521    Aluminum Die-Castings                    Aluminum Die-Casting Foundries
331522    Nonferrous (except Aluminum)             Nonferrous (except Aluminum) Die-Casting
          Die-Castings                              Foundries
 331524   Aluminum Foundries                       Aluminum Foundries (except Die-Casting)
331525    Copper Foundries                         Copper Foundries (except Die-Casting)
331528    Other Nonferrous Foundries               Other Nonferrous Foundries (except Die-Casting)
33210      Iron and Steel Pipes and Tubes          Iron and Steel Pipe and Tube Manufacturing
          Manufacturing from Purchased             from Purchased Steel
          Steel
332611    Steel Spring (except Wire) Manufacturing Spring (Heavy Gauge) Manufacturing
332612    Wire Spring Manufacturing                Spring (Light Gauge) Manufacturing
33322     Rubber and Plastics Industry Machinery   Plastics and Rubber Industry Machinery
           Manufacturing                           Manufacturing


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333414 Heating Equipment (except Electric and      Heating Equipment (except Warm Air Furnaces)
       Warm Air Furnaces) Manufacturing            Manufacturing
333999 All Other General Purpose Machinery         All Other Miscellaneous General Purpose Machinery
       Manufacturing                               Manufacturing
334412 Printed Circuit Board Manufacturing         Bare Printed Circuit Board Manufacturing
334418 Printed Circuit/Electronics Assembly        Printed Circuit Assembly (Electronic Assembly)
       Manufacturing                               Manufacturing
335912 Dry and Wet Primary Battery                 Primary Battery Manufacturing
       Manufacturing
33636 Motor Vehicle Fabric Accessories and         Motor Vehicle Seating and Interior Trim
       Seat Manufacturing                          Manufacturing
337214 Nonwood Office Furniture Manufacturing      Office Furniture (except Wood) Manufacturing
4222   Drug, Drug Proprietaries and Druggists'     Drugs and Druggists' Sundries Wholesalers
       Sundries Wholesalers
42221 Drug, Drug Proprietaries and Druggists'      Drugs and Druggists' Sundries Wholesalers
       Sundries Wholesalers
42233 Women' Children' and Infants' and
                 s,         s,                     Women' Children' and Infants' Clothing and
                                                           s,          s,
       Accessories Wholesalers                     Accessories Wholesalers
42272 Petroleum and Petroleum Products             Petroleum and Petroleum Products Wholesalers
       (except Bulk Stations and                   (except Bulk Stations and Terminals)
       Terminals) Wholesalers
493    Warehousing and Storage Facilities          Warehousing and Storage
4931   Warehousing and Storage Facilities          Warehousing and Storage
49311 General Warehousing and Storage                     General Warehousing and Storage
       Facilities
49312 Refrigerated Warehousing and Storage         Refrigerated Warehousing and Storage
       Facilities
49313 Farm Product Warehousing and Storage         Farm Product Warehousing and Storage
       Facilities
49319 Other Warehousing and Storage Facilities     Other Warehousing and Storage
512131 Motion Picture Theaters, Except Drive-Ins   Motion Picture Theaters (except Drive-Ins)
52231 Mortgage and Other Loan Brokers              Mortgage and Nonmortgage Loan Brokers
523    Securities, Commodity Contracts and         Securities, Commodity Contracts, and Other
       Other Intermediation and Related            Financial Investments and Related Activities
       Activities
52314 Commodity Brokerage                          Commodity Contracts Brokerage
524291 Claims Adjustors                            Claims Adjusting

524292 Third Party Administration for              Third Party Administration of Insurance and Pension
       Insurance and Pension Funds                 Funds
525    Funds, Trusts and Other Financial                   Funds, Trusts, and Other Financial Vehicles
       Vehicles (U.S. only)
533    Owners and Lessors of Other                 Lessors of Nonfinancial Intangible Assets (except
       Non-Financial Assets                        Copyrighted Works)
5331   Owners and Lessors of Other                 Lessors of Nonfinancial Intangible Assets (except
       Non-Financial Assets                        Copyrighted Works)
53311 Owners and Lessors of Other                  Lessors of Nonfinancial Intangible Assets (except
       Non-Financial Assets                        Copyrighted Works)
541614 Process, Physical, Distribution, and        Process, Physical Distribution, and Logistics
       Logistics Consulting Services               Consulting Services
54171 Research and Development in the              Research and Development in the Physical,


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       Physical Sciences and Engineering                    Engineering, and Life Sciences
       Sciences
721214 Recreational and Vacation Camps              Recreational and Vacation Camps (except Campgrounds)
81221 Funeral Homes                                 Funeral Homes and Funeral Services
8123   Laundry Services                             Drycleaning and Laundry Services
813    Religious, Grantmaking, Civic, and           Religious, Grantmaking, Civic, Professional, and
       Professional, and Similar Organizations      Similar Organizations
8139   Business, Professional, Labor, Political,    Business, Professional, Labor, Political, and Similar
       and Other Organizations                      Organizations
81399 Other Similar Organizations                   Other Similar Organizations (except Business, Professional,
                                                    Labor, and Political Organizations)
921     Executive, Legislative, Public Finance,     Executive, Legislative, and Other General
        and General Government                      Government Support
9211    Executive, Legislative, Public Finance,     Executive, Legislative, and Other General
        and General Government                      Government Support
92113   Public Finance                              Public Finance Activities
92119   All Other General Government                Other General Government Support
922     Justice, Public Order, and Safety           Justice, Public Order, and Safety Activities
9221    Justice, Public Order, and Safety           Justice, Public Order, and Safety Activities
92219   All Other Justice, Public Order, and Safety All other Justice, Public Order, and Safety Activities
92313   Administration of Social, Human Resource Administration of Human Resource Programs
        and Income Maintenance Programs              (except Education, Public Health, and Veteran' Affairs
                                                                                                     s
                                                    Programs)
92411   Air and Water Resource and Solid Waste Administration of Air and Water Resource and Solid
        Management                                  Waste Management Programs
92412   Land, Mineral, Wildlife, and Forest         Administration of Conservation Programs
         Conservation




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Structure Changes:

Manufacturing - NAICS U.S. Industry 315238, Women' and Girls'Cut and Sew Other
                                                     s
Outerwear Manufacturing, has been renumbered to 315239. NAICS U.S. industry 322292,
Surface-Coated Paper Board Manufacturing, has been moved and renumbered to NAICS U.S.
industry 322226, Surface-Coated Paperboard Manufacturing. NAICS U.S. industry 322298, All
Other Converted Paper Product Manufacturing, has been renumbered 322299; the title remains
the same.

Professional, Scientific, and Technical Services - NAICS industry 54172, Research and
Development in the Life Sciences, has been combined with 54171, Research and Development in
the Physical Sciences and Engineering Sciences, and renamed Research and Development in the
Physical, Engineering, and Life Sciences. NAICS industry 54173, Research and Development in
the Social Sciences and Humanities, has been renumbered 54172.

Other Services - NAICS industry 81239, Other Laundry Services, has been combined with
NAICS industry 81232, Drycleaning and Laundry Services (except Coin-Operated). The
following NAICS U.S. industries are now included in NAICS industry 81232 and no longer
shown separately: 812321, Laundries, Family and Commercial; 812322, Drycleaning Plants;
812391, Garment Pressing, and Agents for Laundries; and 812399, All Other Laundry Services.

Availability of NAICS United States Manual

The official U.S. reference manual for implementing the new North American Industry
Classification System (NAICS) is now available in both printed and electronic versions from the
National Technical Information Service (NTIS). The NAICS-United States Manual includes:
        C       Definitions for each industry;
        C       Tables showing correspondence between 1997 NAICS and 1987 SIC codes; and
        C       An alphabetical index of types of business activities and their NAICS codes.
        A CD-ROM version of the Manual includes features not available in print versions:
        C       An easy-to-use yet powerful search option, including access to more
                comprehensive index entries; and
        C       NAICS-SIC and SIC-NAICS code comparison files that can be imported into
                databases and spreadsheets.

        NTIS is now accepting orders at 1-800-553-6847 or (703) 605-6000. The NAICS-United
States Manual is available in hardcover (PB98-127293, $32.50), in softcover (PB98-136187,
$28.50), and on CD-ROM (PB98-502024, $45). A $5 handling fee is added to each total order.
For more information or to order online, visit the NTIS NAICS web site at
.

       More information about the new system can be found at the Census Bureau' NAICS
                                                                               s


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World Wide Web site, . The Census Bureau has also established a
toll-free telephone line (1-888-75NAICS) to help businesses and other users with the new system.

NAICS United States Implementation

         The NAICS United States replacement of the SIC is effective January 1, 1997, for Federal
statistical purposes. The first data to be available on a NAICS United States basis will be from
the 1997 Economic Census and the 1997 Foreign Direct Investment Benchmark Survey that will
be published in 1999. For most programs, data will be
introduced over several years. Data series may not always be revised for years before the
respective program' implementation of NAICS United States.
                     s

        INEGI, OMB, and Statistics Canada have put in place a process for ensuring that the
implementation of NAICS is comparable across all three countries. Regularly scheduled meetings
among the three countries will ensure that there is a smooth transition to NAICS in all three
countries. In addition, the three countries plan to continually review and update NAICS to ensure
that new activities are promptly recognized and to extend NAICS to the 5-digit industry level in
those sectors where agreement is now at only the sector, subsector, or industry group level.

Time Series Continuity

        The standard approach to preserving time series continuity after classification revisions is
to create linkages where the series break. This is accomplished by producing the data series using
both the old and new classifications for a given period of transition. With the dual classifications
of data, the full impact of the revision can be assessed. Data producers then may measure the
reallocation of the data at aggregate industry levels and develop a concordance between the new
and old series for that point in time. The concordance creates a crosswalk between the old and
new classification systems. This link between the 1987 U.S. SIC and the 1997 NAICS United
States will be developed by the statistical agencies in the U.S.

Nonstatistical Use of NAICS

         NAICS was designed, as was the SIC before it, solely for statistical purposes. Although it
is likely that NAICS, like the SIC, will also be used for various nonstatistical purposes (e.g.,
administrative, regulatory, or taxation), the requirements of
government agencies that choose to use NAICS for nonstatistical purposes have played no role in
its development.

       Consequently, as has been the case with the SIC (Statistical Policy Directive No. 8,
Standard Industrial Classification of Establishments), NAICS shall not be used in any
administrative, regulatory, or tax program unless the head of the agency administering that
program has first determined that the use of such industry definitions is appropriate to the
implementation of the program' objectives. If the terms, "North American Industry
                                 s


                                                 9
Classification System," "NAICS," or "NAICS United States" are to be used in the operative text
of any law or regulation to define industry (or trade or commerce), language similar to the
following should be used to assure sufficient flexibility: "An industry or grouping of industries
shall mean a North American Industry Classification System industry or grouping of industries as
defined by the Office of Management and Budget subject to such modifications with respect to
individual industries or groupings of
industries as the Secretary (Administrator) may determine to be appropriate for the purpose of
this Act (regulation)."




Donald R. Arbuckle,
Deputy Administrator and Acting Administrator,
Office of Information and Regulatory Affairs.




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