Conversion to North American Industry Classification System (NAICS)
Beginning with the September 18, 2003 news release, industry labor
productivity data
reflect the conversion to the North American Industry Classification
System (NAICS),
which replaces the Standard Industrial Classification (SIC) system as
the basis for assigning
and tabulating data by industry. Due to differences in NAICS and SIC
structures,
NAICS-based industry productivity data are not comparable to the
SIC-based data.
The NAICS classification system is the product of a cooperative effort
on the part
of the statistical agencies of the United States, Canada, and Mexico.
The NAICS differs
from the SIC in that it uses a consistent, production-oriented approach
to categorize
economic units, focusing on how products and services are created rather
than on what is
produced; the SIC was less unified in its approach. The structure of the
NAICS system is
also different from that of the SIC, with a greater emphasis on emerging
industries and
service-producing industries. Under NAICS, some detailed industries that
existed under the
SIC were collapsed or combined with other industries, while other new
industries were added.
Treatment of auxiliaries also changed under NAICS: NAICS classifies
auxiliary units involved
in activities such as transportation and warehousing; accounting,
bookkeeping, and payroll
services; and general management into specialized industries rather than
including them in
the manufacturing, trade, or service industries they support (as in the
SIC). As a result of
these changes, many of the NAICS industries are significantly different
from those in the
SIC system.
Industry output indexes are prepared from basic data published by
various public
and private agencies, using the greatest level of detail available. Data
from the Bureau of
the Census, U.S. Department of Commerce, are used extensively in
developing output
series for manufacturing, trade, and service-producing industries, as
well as in developing
compensation and unit labor cost series for manufacturing industries.
Census Bureau
data for years prior to 1997 were classified according to the Standard
Industrial
Classification (SIC) system. The 1997 Economic Censuses provided data on
a NAICS
basis, and data classified according to NAICS began to be provided in
subsequent Annual
Survey reports beginning in 1998 or 1999. Some data for wholesale and
retail trade
industries have been made available by the Census Bureau on a NAICS
basis back to
1992.
The 1997 Economic Census questionnaires were designed to permit the
classification of each establishment according to both NAICS and SIC. As
a result, the
Census Bureau tabulated and published 1997 Census data on both a NAICS
and SIC
basis. The Bureau of Labor Statistics used these dual-coded data to
calculate conversion
ratios relating NAICS values to SIC values, and the ratios were used to
convert data on
receipts, value of shipments, inventories and labor compensation for
SIC-based industries
to estimates for NAICS-based industries for years prior to 1997.
The labor input series used in the industry productivity measures are
based primarily on
employment and average weekly hours data from the Bureau’s Current
Employment Statistics (CES)
survey and the Current Population Survey (CPS). Other sources are the
Association of American
Railroads, the Department of Transportation, and the U.S. Postal
Service. The CES data were
published on a 2002 NAICS basis with the release of May 2003 data in
June 2003. CES series
are available back to 1990 for all industries maintained by that
program, and for years prior
to 1990 for some industries. CES NAICS industry employment and average
weekly hours series not
available before 1990 were extended back to 1987 by the industry
productivity staff with data
estimated using conversion ratios derived from dual-coded, first-quarter
2001 data from the
Quarterly Census of Employment and Wages (QCEW). These ratios were also
used to convert QCEW
historical annual industry wages from SIC to NAICS for use in the
compensation and
unit labor cost measures for some non-manufacturing industries.
Visit the BLS NAICS
webpage for more information about implementing NAICS at BLS.
Last Modified Date: May 3, 2004
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