How NAICS Will Affect Data Users

Paul T. Zeisset and Mark E. Wallace
Economic Planning and Coordination Division, Bureau of the Census

Abstract: The North American Industry Classification System (NAICS) is replacing the existing Standard Industrial Classification (SIC) system. NAICS makes substantial structural improvements and identifies over 350 new industries. At the same time, it causes breaks in time series far more profound than any prior revision of the SIC system. The 1997 Economic Census presents a unique opportunity to show the interrelationships between the old and new classification systems.
Contents:
Introduction
. . New industries
. . New sectors
. . New numbering system
Dealing with breaks in time series
. . Correspondence tables
. . Generating comparable data
. . Reclassifying existing data
Role of the 1997 Economic Census
. . Comparative statistics tables
. . Bridge tables
. . Plans for 1997
. . Limitations: disclosure-avoidance and resources
User reaction
. . Alternatives for local data users
Effects on other statistical programs
Conclusions
Tables and illustrations
Table 1. Selected new U.S. industries being identified in NAICS
Table 2. NAICS sectors and their corresponding SIC divisions
Table 3. Examples of NAICS hierarchy
Table 4. 1997 NAICS matched to 1987 SIC (excerpts from table 1 in Federal Register)
Table 5. 1987 SIC compared to 1997 NAICS (except from table 2 in Federal Register)
Table 6. Comparative statistics based on SIC
Table 7. Bridge table: Distribution of 1987 SIC-based industries among 1972 SIC-based industries
Table 8. Bridge table: Distribution of 1972 SIC-based industries among 1987 SIC-based industries
Table 9. Historical data displayed by Profile software

Introduction

On April 9, 1997, the Office of Management and Budget (OMB) announced the adoption of a new industry classification replacing the Standard Industrial Classifications (SIC), a system used to classify most of the data we have about industries or kinds of business in our economy. The updating of industry classifications is nothing new. Since its origination in the 1930s, the SIC system has been revised or updated every 10 or 15 years to reflect new developments in the American economy and to address problems identified by data users and statistical agencies.

The most recent change to the SIC system occurred in 1987. That revision identified a number of new high tech industries, tripled the number of classifications within computer-related services, and gave us our first industry categories for computer and software stores, video tape rental stores, and manufacturers of plastic bottles. Nonetheless, the 1987 revision left three quarters of all industries unchanged, and left the broad structure and hierarchy intact, including such basic sector groupings as manufacturing, retail trade, services, and construction.

The objectives for the 1997 revision were much broader. Not only was the system to identify new industries, but the process also sought to reorganize the system according to a more consistent economic principle--according to types of production activities performed--rather than the mixture of production-based and market-based categories in the SIC. That reorganization would allow for the presentation of more detail for the rapidly expanding service sector that accounts for most economic activity but only 40 percent of SIC categories. Further, the system was redefined jointly with Canada and Mexico so that comparable statistics could be obtained for the three NAFTA trading partners.

In 1992, OMB formed the U.S. Economic Classification Policy Committee (ECPC), chaired by the Bureau of Economic Analysis (BEA), and staffed by BEA, the Bureau of Labor Statistics, and the Census Bureau. The ECPC worked together with Statistics Canada and Mexico's Instituto Nacional de Estadistica, Geografia e Informatica (INEGI). This international dimension became so important that, despite national variations, all three countries are referring to the new industry classification as the North American Industry Classification System (NAICS).

The NAICS proposal was fleshed out, industry by industry, in a series of Federal Register notices from 1994 through 1996. The entire proposed classification system appears in the Federal Register notice of April 9, 1997, and a final revision is expected in the fall of 1997. The definitive reference, the North American Industry Classification System--United States, 1997, counterpart to the 1987 SIC Manual, will be published in spring 1998.

New Industries

Table 1 lists some of the new industries being separately recognized for the first time with NAICS. A few of them reflect "high tech" developments such as fiber optic cable manufacturing, satellite communications, and the reproduction of computer software. More of them recognize less technological changes in the way business is done: bed and breakfast inns, environmental consulting, warehouse clubs, pet supply stores, credit card issuing, diet and weight reduction centers. Taken together, these new industries provide an interesting review of the profound ways our economy has changed over recent years.

Table 1: Selected new U.S. industries being identified in NAICS
Semiconductor machinery manufacturing
Fiber optic cable manufacturing
Reproduction of computer software
Manufacture of compact discs except software
Convenience stores
Gas stations with convenience food
Warehouse clubs
Food/health supplement stores
Pet supply stores
Pet care services
Cable networks
Satellite communications
Paging
Cellular and other wireless communications
Telecommunication resellers
Credit card issuing
Temporary help supply
Telemarketing bureaus
Interior design services
Industrial design services
Hazardous waste collection
HMO medical centers
Continuing care retirement commmunities
Casino hotels
Casinos
Other gambling industries
Bed and breakfast inns
Limited service restaurants
Automotive oil change and lubrication shops
Diet and weight reducing centers


New Sectors

NAICS groups the economy into 20 broad sectors, up from the 10 divisions of the SIC system. Many of the new sectors reflect recognizable parts of SIC divisions, such as the Utilities and Transportation sectors, broken out from the SIC division Transportation, Communications, and Utilities. Similarly, the SIC division for Service Industries has been subdivided to form several new sectors with longer names: Professional, Scientific and Technical Services; Management, Support, Waste Management, and Remediation Services; Education Services; Health and Social Assistance; Arts, Entertainment, and Recreation; and Other Services except Public Administration.

Other sectors represent combinations of pieces from more than one SIC division. The new Information sector includes major components from Transportation, Communications, and Utilities (broadcasting and telecommunications), Manufacturing (publishing), and Services Industries (software publishing, data processing, information services, motion picture and sound recording). The Accommodation and Foodservices sector puts together hotels and other lodging places from Service Industries and eating and drinking places from Retail Trade.

Table 2. NAICS Sectors and their Corresponding SIC Divisions

Code NAICS Sectors SIC Divisions Making the Largest Contributions
11 Agriculture, Forestry, Fishing and Hunting Agriculture, Forestry and Fishing
Manufacturing
21 Mining Mineral Industries
Manufacturing
22 Utilities Transportation, Communication, and Utilities
23 Construction Construction Industries
Finance, Insurance, and Real Estate
31-33 Manufacturing Manufacturing
Retail Trade
42 Wholesale Trade Wholesale Trade
44-45 Retail Trade Retail Trade
Wholesale Trade
48-49 Transportation and Warehousing Transportation, Communication, and Utilities
Service Industries
51 Information Transportation, Communication, and Utilities
Manufacturing
Service Industries
52 Finance and Insurance Finance, Insurance, and Real Estate
Retail Trade
53 Real Estate and Rental and Leasing Finance, Insurance, and Real Estate
Service Industries
Transportation, Communication, and Utilities
54 Professional, Scientific, and Technical Services Service Industries
Finance, Insurance, and Real Estate
Agriculture, Forestry, and Fishing
55 Management of Companies and Enterprises Financial, Insurance, and Real Estate
auxiliary establishments in all industries
56 Administrative and Support, Waste Management and Remediation Services Service Industries
Transportation, Communication, and Utilities
Manufacturing
Construction Industries
61 Education Services Service Industries
62 Health Care and Social Assistance Service Industries
Transportation, Communication, and Utilities
71 Arts, Entertainment, and Recreation Service Industries
Retail Trade
Finance, Insurance, and Real Estate
72 Accommodation and Foodservices Retail Trade
Service Industries
81 Other Services (except Public Administration) Service Industries
Finance, Insurance, and Real Estate
Manufacturing
Agriculture, Forestry, and Fishing
92 Public Administration Public Administration
Service Industries


New Numbering System

NAICS industries are identified by a 6-digit code, in contrast to the 4-digit SIC code. The longer code accommodates the larger number of sectors and allows more flexibility in designating subsectors. It also provides for additional detail not necessarily appropriate for all three NAICS countries. The international NAICS agreement fixes only the first five digits of the code. The sixth digit, where used, identifies subdivisions of NAICS industries that accommodate user needs in individual countries. Thus, 6-digit U.S. codes may differ from counterparts in Canada or Mexico, but at the 5-digit level they are standardized.

Table 3 illustrates the hierarchic structure of the NAICS codes.

Table 3. Examples of NAICS Hierarchy

NAICS level Example #1 Example #2
NAICS code Description NAICS code Description
Sector 31-33 Manufacturing 51 Information
Subsector 334 Computer and electronic product manufacturing 513 Broadcasting and telecommunications
Industry group 3346 Manufacturing and reproduction of magnetic and optical media 5133 Telecommunications
Industry 33461 Manufacturing and reproduction of magnetic and optical media 51332 Wireless telecommunications carriers, except satellite
U.S. Industry 334611 Reproduction of software 513321 Paging


Dealing with Breaks in Time Series

The creation of new sectors and the expansion of the industry code from four to six digits certainly suggest that this revision of the industry classification system is more profound than earlier SIC revisions. Yet neither of these changes necessarily affects the ability to link old data on an SIC basis to new data on a NAICS basis.

Data for more than two-thirds of all 4-digit SICs will be derivable from the NAICS system, either because the industry is not being changed (other than in code), or because new industries are being defined as subdivisions of old ones. For example--

On the other hand, many other industries are being changed more profoundly, leading to breaks in the availability of time series data.

The total number of industry classifications is increasing with NAICS (1170 industries applicable in the U.S., up from 1004 SICs), as illustrated by the subdivision of SICs 4953 and 7389 cited above. Of the 1170 industries, 358 are new--not previously recognized separately under SIC, 422 are substantially unchanged while 388 represent revisions to the scope of existing industries. (Two are not applicable in the U.S.)

Correspondence Tables

Users may now examine the detail of the NAICS system using extensive tables recently published in Federal Register notices. The first table (illustrated in table 4, below) shows the full NAICS hierarchy, and the 1987 SICs or parts of SICs that comprise each NAICS industry. A status code of E identifies existing industries without significant change, R for revised industries, and N for new industries. An asterisk (*) preceding an SIC code indicates that only part of the SIC is contributing to the NAICS category on that line, a part defined in parentheses in the 1987 SIC description.

Table 4. 1997 NAICS Matched to 1987 SIC (excerpts from table 1 in Federal Register)
NAICS code NAICS description Status code SIC code 1987 SIC description
5111 Newspaper, periodical, book and database publishing
51111 Newspaper publishing E 2711 Newspapers: publishing or publishing and printing
51112 Periodical publishing E 2721 Periodicals: publishing or publishing and printing
51113 Book publishiing E 2731 Books: publishing or publishingan printing
51114 Database publishing N *2741 Miscellaneous publishing (database publishers)
511191 Greeting card publishing E *2771 Greeting cards
511199 All other publishing R *2741 Miscellaneous publishing (exc. database publishing)
5112 Software publishing
51121 Software publishing R *7372 Prepackaged software (software publishing)


5613 Employment services
56131 Employment placement agencies R *7361

*7819

*7922

Employment agencies (except executive placing)
Services allied to motion picture production (casting bureaus)
Theatrical producers and miscellaneous theatrical services (casting agencies)
56132 Temporary help services N *7363 Help supply services (except employee leasing service)
56133 Employee leasing services N *7363 Help supply services (except temporary help supply service)

The second table (illustrated in table 5, below) lists all 4-digit SICs along with their counterpart NAICS categories. The abbreviation "pt." means "part of", and indicates that this component will be mixed with pieces from other SICs to form the NAICS industry.

A @ symbol in the SIC code column indicates that this category cannot reasonably be approximated from NAICS-based data, i.e., there will be a break in the time series that is estimated to be greater than 3 percent of the 1992 value of output (e.g., sales, shipments) for the 1987 industry.

Table 5. 1987 SIC Compared to 1997 NAICS (excerpt from table 2 in Federal Register)
SIC code 1987 SIC description NAICS code 1997 U.S. description
7361@ Employment agencies
Executive placing services
Except executive placing services

561612
56131


Human resource consulting (pt)
Employment placement agencies (pt)
7363 Help supply services
Temporary help supply
Employee leasing services

56133
56132


Temporary help services

Employee leasing services

The full detail of both tables is accessible here in several formats, including a format easily navigated on the internet, database files in ASCII or dBase formats, portable document format (PDF), and a word processor format. Other contents of Federal Register notices, issue papers, and implementation schedules may also be accessed at the NAICS web site: http://www.census.gov/epcd/www/naics.html.

Generating Comparable Data

Economic data for only one point in time have limited value. Most of the numbers we use take on greater meaning when compared to data for other time periods, allowing inference of development or change. The implementation of NAICS will cause major disruptions in the availability of such time series information, not only for individual industries that are redefined but also for the broad sectors, like manufacturing and retailing, that we use to describe our economy in everyday conversation.

The U.S. Economic Classification Policy Committee recognized the problems with breaking time series, but nonetheless chose to start with a "fresh slate." The Committee concluded a July 1993 issues paper by stating--

Reclassifying existing data

Ideally, given the need to familiarize data users with the new classification system, and given the need to start building the new generation of time series, it would have been desirable to apply the new classification criteria to existing data, such as the results of the 1992 Economic Census. This is possible where SICs have direct counterparts, or where census planners identified kind-of-business categories in 1992 that anticipated the new classifications, such as warehouse clubs, convenience stores, and refreshment places.

Unfortunately, most of the new classifications require information that we simply don't have from 1992 census questionnaires: Was an office supply store set up more like a retail store or a wholesale business? Did a retail bakery offer table service? Was a bank location involved in commercial banking or credit card issuing?

Role of the 1997 Economic Census

The Economic Census has a unique role in supporting a change in the industry classification system. Only the census gathers the comprehensive detail that allows for conclusive determination of industry classification for all establishments. The timing for the entire NAICS development process was largely predicated on the need to make decisions in time for implementation in the 1997 Economic Census.

The 475 variants of the 1997 Economic Census questionnaire have been designed to classify each establishment according to both SIC and NAICS. In some cases that means more questions or categories to identify the type of store or types of services or commodities produced or sold. Designing these questions is critical, more important to the operational definition of these industries than any external documentation.

In 1987, collecting data in this way allowed the publication of basic summaries of 1987 data according to both the old, 1972-based SICs and the new, 1987-based SICs in the earliest final publications from each census, even though the rest of the 1987 census data were classified exclusively according to the new system. Data were presented in two ways:

Comparative statistics tables

"Comparative statistics" tables present new data according to the old system, along with data from one or more earlier censuses based on the same system for comparison. In 1987, comparative statistics tables were shown for old, 1972-based SICs at the state level for retail trade, wholesale trade, and services; and at the national level for manufacturing and mining.

Table 6 illustrates a 1987 comparative statistics table, where each row is defined by the smallest kind-of-business unit identifiable from the previous census. Since they are constrained by the information available from the previous census, comparative statistics tables ignore any new detail introduced in the more recent revision.

Table 6. Comparative Statistics Based on SIC
1972
SIC
Code
1987
SIC
Code


Kind of business or operation
Establishments Receipts
1987 1982 1987 ($1,000) 1982 ($1,000) % chg 82-87
7331 7331 Direct mail advertising services 3512 2145 4097739 1742417 135.2
7332 7334 pt. Blueprinting and photocopying services 3877 3233 1785951 856651 108.5
7333 7335,6 Commercial photography, art, and graphics 13826 10833 5243998 3095499 69.4
7339 7334 pt,
7338
Stenographic services; and reproduction services, n.e.c. 6017 4920 1279613 795943 60.8




Bridge tables

"Bridge" tables take the interrelationships of the old and new classifications one step farther. They present new data cross tabulated by both old and new classification systems at the same time, identifying the lowest common denominators between the two systems. In 1987, bridge tables were produced at the national level only for manufacturing, mining, and construction.

Tables 7 and 8 illustrate 1987 bridge tables, one from the perspective of the new classification, one from the perspective of the old. Each row is defined by the lowest common denominator between the old and new systems.

Table 7. Bridge Table: (Distribution of 1987 SIC-Based Industries Among 1972 SIC-Based Industries)


Industry
Estab-
lish-
ments
Employees
(1000)
Payroll
(million$)
Value of shipment
(million$)
New 3571, Electronic computers 974 151.9 4953.0 33626.5
Old 3573, Electronic Computing Equipment (pt.) 969 151.5 4945.2 33591.9
Old 3662, Radio and Television Commun. Eqp. (pt.) 4 (D) (D) (D)
All other 1 (D) (D) (D)
New 3572, Computer storage devices 106 43.3 1442.6 6394.8
Old 3573, Electronic Computing Equipment (pt.) 106 43.3 1442.6 6394.8
New 3575, Computer terminals 121 15.0 441.7 1799.0
Old 3573, Electronic Computing Equipment (pt.) 115 (D) (D) (D)
Old 3661, Telephone and Telegraph Apparatus (pt.) 6 (D) (D) (D)
New 3577, Computer peripheral equipment, n.e.c. 549 76.2 2625.4 13965.5
Old 3573, Electronic Computing Equipment (pt.) 549 76.2 2625.4 13965.5


Table 8. Bridge Table: (Distribution of 1972 SIC-Based Industries Among 1987 SIC-Based Industries)


Industry
Estab-
lish-
ments
Employees
(1000)
Payroll
(million$)
Value of shipment
(million$)
Old 3573, Electronic Computing Equipment 1852 310.7 10119.4 59195.4
New 3571, Electronic computers (pt.) 969 151.5 4945.2 33591.9
New 3572, Computer storage devices 106 43.3 1442.6 6394.8
New 3575, Computer terminals (pt.) 115 (D) (D) (D)
New 3577, Computer peripheral equipment, n.e.c. 549 76.2 2625.4 13965.5
New 3661, Telephone and telegraph apparatus (pt.) 39 (D) (D) (D)
New 3695, Magnetic & optical recording media (pt.) 67 15.5 401.4 1755.4
Nonmanufacturing 7 2.1 61.0 240.2




The fact that the comparative and bridge tables came out in the earliest final publications was very helpful to users in both getting the trend data (based on the old system) early, and in introducing the new classifications. Nonetheless, when further review resulted in reclassification for some establishments, the bridge tables already published for manufacturing and mining were no longer definitive.

Plans for 1997

Here are highlights of Census Bureau plans for publishing 1997 Economic Census data:

1. In early 1999, in the first "advance" report covering the entire economy, we will publish 1997 national data on a NAICS basis (3-digit subsector detail), and "comparative statistics" for 1997 and 1992 on a 1987 SIC basis (2-digit detail). At the state level, advance data will be limited to totals for the 18 NAICS sectors and comparative statistics for the 8 SIC divisions covered in the 1997 Economic Census (excluding agriculture and public administration, largely covered in the independent censuses of agriculture and governments).

2. Roughly a year later, in early 2000, we will publish detailed bridge tables covering all industries at the national level, and comparative statistics for all industries at both state and national levels.

3. All other data will be published only on a new, NAICS basis. Thus, the first industry-specific numbers, to be published in 1999, will not support comparisons to earlier years for any industries that changed in definition. Outside of the limited comparative statistics tables, historical data will appear only for those industries that remained unmodified or can be converted cleanly into NAICS.

As in previous censuses following changes to the SIC, no comparability tables will be available for metropolitan areas, counties or cities. All substate data from the 1997 census will be published on a NAICS basis only.

The absence of 1997 data published on an SIC basis below the state level, coupled with the magnitude of the changes in sector definitions, means that the popular Economic Census Profiles can no longer include historical data at the sector level, illustrated below, that have been available on CD-ROMs from the last two censuses.

Table 9. Historical Data Displayed by Profile Software (not possible for 1997)
1992 Economic Census Profile: Retail, Wholesale, Service
Fairfax County, VA

Table 1 - General Statistics by Sector
Sector
Year Number
of
Estabs
Sales or
Receipts
($millions)
Annual
Payroll
($millions)
Number
of
Employees
Retail Trade 1992 4,162 7,211.0 916.6 61,304
1987 3,517 5,782.8 703.8 63,467
1982 2,660 3,302.1 394.0 41,660
Wholesale Trade 1992 1,134 10,790.2 711.5 17,860
1987 913 9,177.2 499.1 15,950
1982 607 4,381.6 237.1 9,732
Service Industries ** 1992 8,129 10,350.0 4,008.3 121,221
1987 6,078 5,712.4 2,372.4 96,059
1982 3,807 2,167.6 956.7 49,860

Limitations: Disclosure-Avoidance and Resources

The reader may well question why the plans to publish historically comparable data on an SIC basis are so modest. After all, the 1997 census is being designed to allow the classification of data according to both old and new system, and we know that users will want as much historically comparable data as possible.

The Census Bureau protects the confidentiality of the information businesses provide by avoiding the publication of any data that could be associated with any particular establishment or company. While nearly all industries have been defined in such a way that there are enough companies present to support tabulation at the national level, many of the SIC-by-NAICS combinations may be so small that they are dominated by individual companies. That will preclude the publication of some parts of the national bridge tables, as illustrated by the (D)s in Table 7 above, as well as comparative statistics for some industries--or even sectors--for some states.

Disclosure analysis in any one Economic Census table is generally a straightforward process. Disclosure analysis across multiple, non-nested classification systems can become exceedingly complex, and the Census Bureau has not been able to reduce this complex analysis entirely to computerized algorithms. It is the large amount of analyst time required to undertake disclosure analysis, more than anything else, that limits the Bureau's ability to publish the 1997 Economic Census according to both the NAICS and SIC systems. Tight budgets in recent years have not allowed the agency to fully maintain, much less build up, the kind of staff necessary to take on this additional work, and tight budgets in future years could reduce further our ability to complete this extremely important work in a timely manner.

Another impact of budgetary limitations is that the coverage of the 1997 Economic Census will not be complete for several of the new NAICS sectors. That is because several activities in agriculture services, forestry, and fisheries--which have not been included in previous economic censuses--are moving to other sectors. For example, veterinary services and landscape design are moving to the Professional, Scientific and Technical Services sector. Summaries for that sector in the Economic Census will be incomplete until funding is available to cover those firms not previously included.

Given that the Census Bureau will not be able to fully publish 1997 Economic Census data according to both systems, some users might have preferred that SIC rather than NAICS be given the priority for publication. Doing so would have given users the full comparable detail for now, provide for enough NAICS data to get us used to the new concepts, and allow a gradual transition toward more complete implementation of NAICS in 2002. That alternative was rejected because the Bureau generally recognizes that NAICS is a better system than SIC, it includes many new industry categories that many users are eager to have, and both the Bureau and data users are going to have to make the transition some time. In essence, let's get on with it.

User Reaction

All in all, the initial public reaction to the introduction of NAICS has been positive. Business leaders and trade associations recognize that the new industry classification system will be better than the SIC and more relevant to today's economy.

Those involved in studying the international economy are excited to gain new tools for examining production and sales across Canada, Mexico and the U.S. The statistics may not make audible the "giant sucking sound" Ross Perot predicted, but analysts will now be able to make better inferences about the long-term effects of NAFTA.

A number of trade associations and companies associated with new industries are especially eager to see statistics on the NAICS basis. The American Society of Interior Design is an example of a group not particularly concerned with historical comparability in 1997. Interior designers now have their own industry in NAICS, whereas under the SIC they were a tiny part of the large category "business services not elsewhere classified."

Perhaps the group least well served in the changeover to NAICS are users of substate data. The 1997 Economic Census will publish some historically comparable data at the state level, but people interested in smaller geographic areas will be left without answers to rather basic questions like--

There will doubtless be many expressions of dismay among users as they become aware of the breaks in time series associated with the conversion to NAICS. The essential question now is how users can be helped to prepare to deal with the situation, given that there is still some time before the first NAICS-based data appear in early 1999.

Alternatives for local data users

Data users will have a few alternatives.

1997 County Business Patterns (CBP). The Census Bureau creates CBP data largely by taking the results of the 5-year census and updating them on an establishment-by-establishment basis with a survey of large multiunit companies coupled with employment and payroll information for all companies from the quarterly payroll tax records reported to the Social Security Administration. CBP does not pick up any new classification information from the census until the nominal year after the census year, so the 1997 CBP will still be reported by SIC, and will not convert to NAICS until data year 1998 (to be published in 2000). CBP reports the number of establishments, employment and payroll, but includes no measures of sales or output. And industry classification in CBP that is based on updates to old information cannot be as accurate as industry classification resulting from direct observation in an economic census.

Synthetic estimates. Synthetic estimation is a fancy term for what many users do rather routinely: apply proportions or trends derived from one data set to a related data set or subclass. Users could apply state trends published by SIC-based industry group to the local level, or could prorate NAICS-based data for their locality into SICs using national bridge tables. Those users may or may not be aware of how unreliable their results could be.

Special tabulations. A proposal has been made that the Census Bureau publish 1997 totals by SIC division, e.g., manufacturing and retailing, for metro areas, counties and places. Doing so would allow the publication of the economic profiles illustrated in table 9, even though some of the results would have to be suppressed to avoid disclosing information about particular companies.

Unfortunately, these tabulations will require more resources than the economic census program expects to have in 1999 and 2000, and it may be that local area information by SIC can be produced only on an ad hoc basis with users paying the cost of the special tabulations.

Effects on Other Statistical Programs

The introduction of NAICS will, ultimately, have a far-reaching impact on the entire U.S. statistical system. In particular, statistical agencies face many challenges in the conversion to NAICS for the Census Economic Current Surveys and for national accounts statistics produced by the Bureau of Economic Analysis, the Federal Reserve Board, and the Bureau of Labor Statistics.

Consistent with past practices, the introduction of this new classification system scheme begins with the quinquennial sEconomic Census. Other programs like the Annual Survey of Manufactures, County Business Patterns, the Economic Current Surveys, and national accounts statistics will convert to the new scheme in the several years that follow. Unlike past SIC revisions, though, the change from an SIC to a NAICS basis is so large that it requires that several agencies consider new approaches for converting their programs to NAICS.

Examples of new approaches being considered by various agencies include--

A NAICS Implementation Schedule lists target publication dates for the first NAICS-based data from each of over 30 different surveys and other statistical products from Census, BEA and BLS. The schedule, as well as a wide variety of tables, documents, and papers, are accessible from the NAICS web site: http://www.census.gov/epcd/www/naics.html.

Conclusions

In the long run, the conversion of economic statistics from the SIC system to NAICS will be seen as an important step toward providing a strong foundation for statistical information in coming decades. Nonetheless, the data user community faces a major upheaval--losing some of their ability to look at consistent statistics over time. Hopefully, statistical agencies and others will undertake analytical and educational activities to help us all through this transition.


Revised: 2/23/98
back to Census