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Part X--Proposed New Industry Structure for Rental and Leasing …
Tags: additional detail, american industry classification, automotive equipment, constructi, data users, digit level, industry classification system, industry structure, interested data, jack e triplett, leasing section, leasing services, naics structure, north american industry classification system, north american industry classification system naics, passenger cars, recreation vehicles, structure xx, utility trailers, xxxx,Pages: 12
Language: english
Created: Mon Jun 3 10:22:32 1996
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Part X--Proposed New Industry Structure for Rental and Leasing
Section A--NAICS Structure
North American Industry Classification System
(NAICS)
Agreement Number 20
This Document represents the proposed agreement on the structure of the North American
Industry Classification System (NAICS) for the following industries:
Rental and Leasing
The detailed NAICS structure along with a brief description of the structure is attached
(Attachments 1 and 2). Each country agrees to release a copy of the proposed NAICS
structure to interested data users. Comments received will be shared among the countries and
additional discussions will be held before a final decision on the structure is made. Each
country may add additional detailed industries, below the 4-digit level of NAICS, as
necessary to meet national needs, so long as this additional detail aggregates to a 4-digit
NAICS level in order to ensure full comparability among the three countries. This NAICS
structure was presented and provisionally accepted at the NAICS Committee meeting held on
November 8 and November 9, 1995 in Washington, D.C.
Accepted Signature Date
Canada /S/ Jacob Ryten 11/9/95
Mexico /S/ Enrique Ordaz 11/9/95
United States /S/ Jack E. Triplett 11/9/95
ATTACHMENT 1--NAICS STRUCTURE
XX Rental and Leasing Services
XXX Rental and Leasing of Automotive Equipment Without Drivers
XXXX Rental and Leasing of Passenger Cars Without Drivers
XXXX Rental and Leasing of Trucks Without Drivers, Utility Trailers, and Recreation
Vehicles
XXX Rental and Leasing of Consumer Goods
XXXX Rental of Consumer Electronics, Appliances and Home and Garden Tools
XXXX Rental of Formal Wear and Costumes
XXXX Rental of Video Tapes
XXXX Other Rental and Leasing of Consumer Goods
XXX Rental and Leasing of Machinery and Equipment
XXXX Rental and Leasing of Heavy Construction, Transportation, Mining and
Forestry Machinery and Equipment
XXXX Rental and Leasing of Office Machinery and Equipment
XXXX Rental and Leasing of Other Machinery and Equipment
Attachment 2--North American Industrial Classification System
Draft Classification for:
Rental and Leasing
Representatives of the statistical agencies of Canada, Mexico, and the United States agree
to a draft industry classification for these industries.
The draft classification provides for the subsector Rental and Leasing. This subsector is
further subdivided into three industry groups and nine industries. The placement of this
subsector within the NAICS structure is not yet decided.
A General Outline
The Rental and Leasing subsector includes establishments that acquire and own a wide
variety of tangible goods, such as machinery, equipment, computers and consumer goods, and
rent or lease these goods to customers, businesses or individuals in return for a periodic rental
or lease payment.
The subsector includes two main types of establishments: those that provide rental of
various consumer goods and equipment and those that provide longer term leases for
machinery and equipment generally used in business operations. The first type generally
provide short-term rentals and operate from a retail-like facility. The latter type typically have
direct contact with individual clients, work with the clients to determine their individual
needs, and tailor the lease arrangement to those specific ends. They often restructure the lease
to provide clients with more appropriate equipment as the clients' needs change and they have
expertise in remarketing or disposing of previously leased equipment and typically do not
operate a retail-like facility.
Rental and leasing activities are currently dispersed throughout the classification systems
of the three countries. This grouping brings together those activities with similar production
processes.
Establishments that act as a third party in providing financing or credit to enable the
acquisition of the equipment through a lease arrangement, such as banks or credit subsidiaries
of manufacturing companies, are excluded from this subsector. They are classified in the
Finance and Insurance sector. Also excluded are those establishments primarily engaged in
renting or leasing real property (land and buildings). They are classified in the Real Estate
subsector. Those establishments that primarily engage in renting or leasing equipment with
operators are classified in various subsectors of NAICS depending on the nature of the service
provided (for example, Transportation or Construction). These activities are excluded from
this subsector since the lessee is paying for the expertise and knowledge of the equipment
operator, in addition to the rental of the equipment. In many cases, such as the rental of heavy
construction equipment, the operator is essential to operate the equipment. Likewise, because
the provision of crop harvesting services includes both the equipment and operator, it is
included in the agriculture subsector. The rental or leasing of intangibles or intellectual
property is, for the most part, classified in the following proposed subsectors or sectors:
Information; Professional, Scientific and Technical Services; and Arts, Entertainment and
Recreation. The choice of industry is based on the nature and origin of the intangible property
being made available for rental or leasing.
This subsector is subdivided into three industry groups. Establishments primarily engaged
in rental and leasing of passenger cars, trucks and utility trailers comprise one industry group.
This reflects the increasingly common practice of leasing these types of equipment,
particularly passenger cars. These establishments generally operate a retail-like facility, some
offer only short term rental, others only longer term leases, and some provide both type of
services.
The second industry group includes establishments primarily engaged in renting and
leasing personal and household goods. Establishments classified in this industry group often
operate from a retail like or storefront facility and normally offer rental and leasing of goods
for relatively short periods of time.
The third industry group includes establishments primarily engaged in renting and leasing
machinery and equipment. The types of establishments included in this industry group are
generally involved in providing capital or investment type equipment that clients use in their
business operations. These operations are typically characterized by a business to business
relationship and do not generally involve a retail like facility or operation.
Limitations and Constraints of the Classification
The proposed classification structure does not provide for complete coverage of all rental
and leasing activity. There are a number establishments engaged in rental, leasing and related
activities included in other areas of the classification. The most important are establishments
renting and leasing transportation equipment with operators, establishments providing
financing for lease arrangements (Finance and Insurance sector) and those renting and leasing
real estate (Real Estate subsector). In addition, the structure excludes the distribution arm of
manufacturers that use leasing as an alternative means of distributing their parent company's
products. These establishments' production processes are more like the sector to which they
have been assigned than to the production process of establishments included in the Rental
and Leasing subsector.
The categories in this subsector are based on production processes. Because of this it does
not allow for the analysis of rental and leasing activities by market segment. Some of the
industries in the proposed structure cater primarily to businesses and others cater primarily to
households; many establishments cater to both businesses and households. Establishments
renting passenger cars and those renting home and garden tools are perhaps the best
examples.
Relationship to ISIC
Four of the nine proposed industries are contained within Division 71, Renting of
Machinery and Equipment without Operator, of the current International Standard Industrial
Classification of all Economic Activities (ISIC, Revision 3) of the United Nations. The
following NAICS industry cannot be assigned to an ISIC division without being subdivided:
Other Rental and Leasing of Consumer Goods industry that includes components of Division
71, Renting of Machinery and Equipment without Operator and of Personal and Household
Goods and Division 92, Recreational, Cultural and Sporting Activities (rental of recreational
equipment). However, these are small activities and should not significantly affect
comparability between this NAICS subsector and ISIC Division 71. The remaining five
proposed industries are contained within ISIC Division 71 and ISIC Division 65, Financial
Intermediation, Except Insurance and Pension Funding (financial leasing). All establishments
involved in direct leasing are classified in the Rental and Leasing subsector in NAICS
regardless of the type of lease contract.
Changes to National Classifications
For Canada, the adoption of a Rental and Leasing subsector represents a significant
departure from its current practice. Although the 1980 Canadian Standard Industrial
Classification (CSIC) contains two industry groups for this type of activity, CSIC 991,
Machinery and Equipment Rental and Leasing Services, and CSIC 992, Automobile and
Truck Rental and Leasing Services, many rental and leasing activities are distributed
throughout the classification. The proposed NAICS structure consolidates most rental and
leasing activities here.
The most important structural change is the transfer to this subsector of the following
activities: rental and leasing, without operators, of airplanes, ships and railway equipment
from the transportation subsector (CSIC's 4522, 4532, 4544); rental and leasing of computer
and related equipment from the computer services industry (CSIC 7721); and rental and
leasing of a variety of recreational equipment from the Amusement and Recreational Services
major group (CSIC 96). Since many of these activities are components of existing industries,
there is a significant number of partial relationships between the proposed and existing
classifications.
The content of existing rental and leasing industries has also been distributed among the
proposed industries. For example, it is proposed to classify the rental and leasing of passenger
automobiles and of trucks and recreational vehicles in different industries; these activities are
currently classified in the same industry CSIC 9921, Automobile and Truck Rental and
Leasing Services. Similarly, the major components of CSIC 9912, Rental and Leasing of
Audiovisual Equipment (consumer electronics, home movies and audiovisual equipment for
the trade), are assigned to three different NAICS industries.
For Mexico, this subsector includes 13 classes of CMAP: one of these classes is the
equivalent of one NAICS industry; five CMAP classes make up four NAICS industries, and
seven of the remaining CMAP classes are combined to create six NAICS industries. These
final classes are not new but rather represent combinations of existing CMAP classes.
The rental and leasing subsector presents two important changes with respect to CMAP.
The first is the reclassification of the services of buses rented without chauffeur that was
classified in CMAP 711318, Scholastic Transportation Services and Tourism, and the rental
of automobiles without chauffeur that was classified in CMAP 711319, Rental Services of
Automobiles.
The second change refers to the separation of the CMAP 831121, Services of Television
Rental, Sound Equipment, Videocassettes and Musical Instruments, that is divided into three
parts: video rental centers and rental centers for appliances and electronics are in the same
industry in NAICS, and the third part of the CMAP rental class, rental of musical instruments,
has been combined with the rental of compact disks to create another NAICS industry.
For the United States, the proposed NAICS structure includes 1987 SIC Industry Group
751, Automotive Rental and Leasing, Without Drivers; 1987 SIC Industry Group 735,
Miscellaneous Equipment Rental and Leasing; 1987 SIC 7377, Computer Rental and Leasing;
1987 SIC 7841, Video Tape Rental; 1987 SIC 4741, Rental of Railroad Cars; and components
of other transportation, personal, motion picture, amusement service, and miscellaneous
business credit institutions industries. These changes are designed to bring together
establishments that primarily rent or lease a wide variety of machinery or goods to individuals
or businesses. While in most of these cases, the whole 1987 industry group is moving to the
new NAICS subsector, selected 1987 4-digit industries are split to better define rental and
leasing activities. This is particularly true in the case of 1987 SIC 7359, Equipment Rental
and Leasing, NEC, that has been substantially reduced in size by the redistribution of
activities formerly classified there.
Achievement of Objectives
The proposed classification structure meets the objectives for the North American Industry
Classification System (NAICS) in that it comprises industries that group establishments with
similar production processes and achieves comparability for the three participating countries.
The NAICS structure consolidates rental and leasing of equipment and goods in one subsector
and provides a structure, as well as individual industries, that recognizes specialized segments
within the subsector.
The industries are economically significant. Some NAICS industries are larger than
others, but this was necessary to ensure comparability among the countries or because it was
not possible to subdivide large industries.
Finally, disruptions to time series, while they exist, have been minimized to the extent
possible. Most of the changes reflect the regrouping of diverse residual categories to create
new industries that better define the activities.
Section B-Annex: United States National Industry Detail
As explained in the Structure presentation of this notice, for a number of reasons 4-digit
industries in the NAICS industry subsector presented in Part X, Section A--Attachment I,
contain less detail than is currently in the U.S. SIC system, and less detail than is required to
meet important analytical requirements in the U.S. The three country agreement on NAICS
envisions that each country may develop national detailed industries below the NAICS
industry level, so long as the national detail can be aggregated to the NAICS classification,
thus assuring full North American comparability.
The ECPC is proposing U.S. 5-digit industry detail for the NAICS industry subsector
covered in Part X of this notice. For cases where no 5-digit detail is shown, the ECPC is
proposing that the NAICS 4-digit industries will also represent the most detailed U.S.
industries.
TABLE 1
The definitions of status codes are as follows: E-existing industry; N-new industry; R-revised industry; and * means "part of". The abbreviation NEC is used for Not Elsewhere Classified.
1987
Status SIC
1997 NAICS and U.S. description Code Code 1987 SIC description
XX Rental and Leasing Services
XXX Rental and Leasing of Automotive Equipment Without Drivers
XXXX Rental and Leasing of Passenger Cars Without Drivers
XXXXX Rental of Passenger Cars Without Drivers E 7514 Passenger Car Rental
XXXXX Leasing of Passenger Cars Without Drivers R *6159 Miscellaneous Business Credit Institutions (fleet leasing)
7515 Passenger Car Leasing
XXXX Rental and Leasing of Trucks Without Drivers, Utility Trailers N *6159 Miscellaneous Business Credit Institutions (truck leasing)
and Recreational Vehicles
7513 Truck Rental and Leasing Without Drivers
7519 Utility Trailers and Recreational Vehicle Rental
XXX Rental and Leasing of Consumer Goods
XXXX Rental of Consumer Electronics, Appliances and Home and
Garden Tools
XXXXX Rental of Consumer Electronics and Appliances N *7359 Equipment Rental and Leasing, NEC (appliances, TV, VCR, and
electronic equipment rental)
XXXXX Rental and Leasing of Home and Garden Equipment N *7359 Equipment Rental and Leasing, NEC (home and garden tool rental)
XXXX Rental of Formal Wear and Costumes N *7299 Miscellaneous Personal Services, NEC (costume, dress suit, and tuxedo
rental)
*7819 Services Allied to Motion Picture Production (wardrobe rental for motion
picture film production)
XXXX Rental of Video Tapes E 7841 Video Tape Rental
XXXX Other Rental and Leasing of Consumer Goods
XXXXX Rental and Leasing of Home Health Furniture and N *7352 Medical Equipment Rental and Leasing (home health furniture and
Equipment equipment rental and leasing)
XXXXX Rental of Recreational Goods N *7999 Amusement and Recreation Services, NEC (canoe, pleasure boats,
bicycles, motorcycles, moped, go carts, etc. rental)
XXXXX All Other Rental and Leasing of Consumer Goods R *7299 Miscellaneous Personal Services, NEC (locker rental, except cold
storage)
*7359 Equipment Rental and Leasing, NEC (except transportation equipment,
industrial equipment, and consumer electronics, appliances and home and
garden equipment)
XXX Rental and Leasing of Machinery and Equipment
XXXX Rental and Leasing of Heavy Construction, Transportation,
Mining and Forestry Machinery and Equipment
XXXXX Rental and Leasing of Commercial Air, Rail, and Water N *4499 Water Transportation Services, NEC (ship rental, commercial)
Transportation Equipment
*4741 Rental of Railroad Cars (rental of railroad cars)
*6159 Miscellaneous Business Credit Institutions (other heavy transportation
equipment finance leasing, except automotive)
*7359 Equipment Rental and Leasing, NEC (airplane rental and leasing)
XXXXX Rental and Leasing of Heavy Construction, Mining and R *6159 Miscellaneous Business Credit Institutions (heavy machinery and
Forestry Machinery and Equipment equipment finance leasing)
7353 Heavy Construction Equipment Rental and Leasing
*7359 Equipment Rental and Leasing, NEC (oil field and well drilling
equipment)
XXXX Rental and Leasing of Office Machinery and Equipment N *6159 Miscellaneous Business Credit Institutions (office equipment)
*7359 Equipment Rental and Leasing (office machine rental and leasing)
7377 Computer Rental and Leasing
XXXX Rental and Leasing of Other Machinery and Equipment N *6159 Miscellaneous Business Credit Institutions (other)
*7352 Medical Equipment Rental and Leasing (except invalid supplies and
home health furniture and equipment)
*7359 Equipment Rental and Leasing, NEC (industrial truck and equipment
rental and leasing)
*7819 Services Allied to Motion Picture Production (motion picture equipment
rental)
*7922 Theatrical Producers (except motion picture) and Miscellaneous
Theatrical Services (theatrical equipment rental)
TABLE 2
The definitions of status codes are as follows: E-existing industry; N-new industry; R-revised industry; and * means "part of". The abbreviation NEC is used for Not Elsewhere Classified.
1987 SIC code 1987 SIC description 1997 U.S. description
4499 Water Transportation Services, NEC
Ship Rental, Commercial Rental and Leasing of Commercial Air, Rail, and Water Transportation Equipment (pt)
4741@ Rental of Railroad Cars Rental and Leasing of Commercial Air, Rail, and Water Transportation Equipment (pt)
6159@ Miscellaneous Business Credit Institution
Automobile Fleet Finance Leasing Leasing of Passenger Cars Without Drivers (pt)
Truck Finance Leasing Rental and Leasing of Trucks Without Drivers, Utility Trailers, and Recreational Vehicles (pt)
Air, Rail, and Water Equipment Finance Leasing Rental and Leasing of Commercial Air, Rail, and Water Transportation Equipment (pt)
Heavy Machinery and Equipment Finance Leasing Rental and Leasing of Heavy Construction , Mining, and Forestry Machinery
and Equipment (pt)
Office Machinery and Equipment Finance Leasing Rental and Leasing of Office Machinery and Equipment (pt)
Other Machinery and Equipment Finance Leasing Rental and Leasing of Other Machinery and Equipment (pt)
7299 Miscellaneous Personal Services
Formal Wear and Costume Rental Rental of Formal Wear and Costumes (pt)
Locker Rental, Except Cold Storage All Other Rental and Leasing of Consumer Goods (pt)
7352@ Medical Equipment Rental and Leasing
Home Health Furniture and Equipment Rental and Leasing Rental and Leasing of Home Health Furniture and Equipment
Medical Machinery Rental and Leasing Rental and Leasing of Other Machinery and Equipment (pt)
7353 Heavy Construction Equipment Rental and Leasing Rental and Leasing of Heavy Construction, Mining and Forestry Machinery
and Equipment (pt)
7359@ Equipment Rental and Leasing, NEC
Consumer Electronics and Appliances Rental and Leasing Rental of Consumer Electronics and Appliances
Home and Garden Tools and Equipment Rental and Leasing Rental and Leasing of Home and Garden Equipment
Residential Furniture, Party Supplies, and All Other All Other Rental and Leasing of Consumer Goods (pt)
Miscellaneous Consumer Goods Rental and Leasing
Oilfield and Well Drilling Machinery and Equipment Rental and Rental and Leasing of Heavy Construction, Mining and Forestry Machinery and Equipment
Leasing (pt)
Airplane Rental and Leasing Rental and Leasing of Commercial Air, Rail, and Water Transportation Equipment (pt)
Office Machinery and Equipment Rental and Leasing Rental and Leasing of Office Machinery and Equipment (pt}
Industrial Trucks Rental and Leasing Rental and Leasing of Other Machinery and Equipment (pt)
7377 Computer Rental and Leasing Rental and Leasing of Office Machinery and Equipment (pt)
7513 Truck Rental and Leasing, Without Drivers Rental and Leasing of Trucks Without Drivers, Utility Trailers and Recreational Vehicles (pt)
7514 Passenger Car Rental Rental of Passenger Cars Without Drivers
7515 Passenger Car Leasing Leasing of Passenger Cars Without Drivers (pt)
7519 Utility Trailer and Recreational Vehicle Rental Rental and Leasing of Trucks Without Drivers, Utility Trailers and Recreational Vehicles (pt)
7819 Services Allied to Motion Picture Production
Wardrobe Rental for Motion Picture Film Production Rental of Formal Wear and Costumes (pt)
Motion Picture Equipment Rental Rental and Leasing of Other Machinery and Equipment (pt)
Talent Payment Services Payroll Services (pt) (Included in Professional, Technical, and Scientific Services subsector)
7841 Video Tape Rental Rental of Video Tapes
7922@ Theatrical Producers (Except Motion Picture) and Miscellaneous Rental and Leasing of Other Machinery and Equipment (pt)
Theatrical Services
Theatrical Equipment Rental Rental and Leasing of Other Machinery and Equipment (pt)
7999@ Amusement and Recreation, NEC
Recreational Goods Rental Including Pleasure Boats Rental of Recreational Goods (pt)
Description of Changes to the U.S. System
Rental and Leasing Services - Fourteen industries are included in this NAICS
subsector. Nine of these are new industries; three are revised 1987 SIC industries; and
two are industries that existed in 1987. The primary focus of this subsector is to bring
together, in one subsector, those establishments that primarily rent or lease a wide
variety of machinery or goods to individuals or businesses. This subsector is
significantly shaped by the splitting apart and/or regrouping of activities of 1987 SIC
Industry Group 735, Miscellaneous Equipment Rental and Leasing. Additionally,
activities from other 1987 major groups are included here because of the similarity of
their production processes and to better achieve comparability with Mexico and
Canada. The following new industries were added for 1997:
Rental and Leasing of Trucks Without Drivers, Utility Trailers and Recreational
Vehicles from 1987 SIC 7513, Truck Rental and Leasing Without Drivers; 1987 SIC
7519, Utility Trailers and Recreational Vehicles Rental; and part of 1987 SIC 6159,
Miscellaneous Business Credit Institutions.
Rental of Consumer Electronics and Appliances from part of 1987 SIC 7359,
Equipment Rental and Leasing, NEC.
Rental and Leasing of Home and Garden Equipment from part of 1987 SIC 7359,
Equipment Rental and Leasing, NEC.
Rental of Formal Wear and Costumes from part of 1987 SIC 7299, Miscellaneous
Personal Services, NEC, and part of SIC 7819, Services Allied to Motion Picture
Production.
Rental and Leasing of Home Health Furniture and Equipment from part of 1987
SIC 7352, Medical Equipment Rental and Leasing.
Rental of Recreational Goods from part of 1987 SIC 7999, Amusement and
Recreation Services, NEC.
Rental and Leasing of Commercial Air, Rail, and Water Transportation Equipment
from part of 1987 SIC 4499, Water Transportation Services, NEC; part of 1987 SIC
4741, Rental of Railroad Cars; part of 1987 SIC 6159, Miscellaneous Business Credit
Institutions; and part of 1987 SIC 7359, Equipment Rental and Leasing, NEC.
Rental and Leasing of Office Machinery and Equipment from part of 1987 SIC
6159, Miscellaneous Business Credit Institutions; 1987 SIC 7377, Computer Rental
and Leasing; and part of 1987 SIC 7359, Equipment Rental and Leasing, NEC.
Rental and Leasing of Other Machinery and Equipment from part of 1987 SIC
6159, Miscellaneous Business Credit Institutions; part of 1987 SIC 7352, Medical
Equipment Rental and Leasing; part of 1987 SIC 7359, Equipment Rental and
Leasing, NEC; part of 1987 SIC 7819, Services Allied to Motion Picture Production;
and part of 1987 SIC 7922, Theatrical Producers (Except Motion Picture) and
Miscellaneous Theatrical Services
The following three 1997 industries were modified from their 1987 definitions:
Leasing of Passenger Cars Without Drivers from part of 1987 SIC 6159,
Miscellaneous Business Credit Institutions and 1987 SIC 7515, Passenger Car
Leasing.
All Other Rental and Leasing of Consumer Goods from part of 1987 SIC 7299,
Miscellaneous Personal Services, NEC, and part of 1987 SIC 7359, Equipment Rental
and Leasing, NEC. This industry brings together all miscellaneous rental and leasing
of equipment and goods not specified in any of the other NAICS industries because of
the similarity of production process among all of these activities
Rental and Leasing of Heavy Construction, Mining, and Forestry Machinery and
Equipment from part of 1987 SIC 6159, Miscellaneous Business Credit Institutions;
1987 SIC 7353, Heavy Construction Equipment Rental and Leasing; and part of 1987
SIC 7359, Equipment Rental and leasing, NEC. This industry was modified for
comparability with Canada and Mexico.
The number of rental and leasing industries increased from 10 in 1987 to 14 in
1997. For time series linkage, 6 of the 10 1987 industries are comparable within three
percent of the 1997 industries. Most of the changes reflect the regrouping of diverse
residual categories to create new industries that better define the activities. For
example, new industries have been created from 1987 SIC 7359, Equipment Rental
and Leasing, NEC; 1987 SIC 7299, Miscellaneous Personal Services, NEC; and 1987
SIC 7999, Amusement and Recreation Services, NEC. These new industries include,
among others, Rental and Leasing of Heavy Construction, Transportation, Mining and
Forestry Machinery and Equipment; Rental and Leasing of Office Machinery and
Equipment; and Rental of Consumer Electronics and Appliances.