# Economic Classification Policy Committee: Standard Industrial Classification ReplacementThe North American Industry Classification System Proposed Industry Classification Structure > Briefs, arguments, decisions, and more. URL: https://www.frixlaw.com/law-library/documents/fr%3A96-13039 ## Record - **Collection:** Federal Register - **Document type:** Notice - **Published:** May 28, 1996 - **Citation:** 61 FR 26558 ## Text SUMMARY: Under Title 44 U.S.C. 3504, the Office of Management and Budget (OMB) is seeking public comment on a series of notices documenting the development of the new North American Industry Classification System (NAICS), the industry classification system being proposed to replace the current Standard Industrial Classification (SIC) system. All Federal agencies that collect establishment-based data are expected to utilize the new system. This notice, the fifth related to preparation of NAICS and the third in a series seeking comment on proposed industry structures, presents the proposed industry structure for the NAICS subsectors listed in the Supplementary Information section below. This notice also presents alternatives for the NAICS coding system. OMB is seeking comments on the usefulness and advisability of the proposed new NAICS subsectors submitted by the Economic Classification Policy Committee (ECPC), an interagency committee established by OMB, and on the NAICS coding system. The next Federal Register notice will present the entire structure of NAICS and seek comment on that structure and other industry sectors and subsector proposals. NAICS is being developed in cooperation with Statistics Canada and Mexico's Instituto Nacional de Estadistica, Geografia e Informatica (INEGI). The new NAICS system provides common industry definitions for Canada, Mexico, and the United States to facilitate economic analyses that cover the economies of the three North American countries. The three country collaboration on an industry classification system for North America was announced for public comment in the Federal Register, July 26, 1994, pp. 38092-38096. The July 26, 1994 Federal Register notice includes the concepts for the new system, as developed by Statistics Canada, Mexico's INEGI, and the ECPC. It also includes a copy of the joint statement of the three countries' statistical agencies regarding the development of NAICS. That agreement includes the following principles: (1) NAICS will be erected on a production-oriented, or supply- based, conceptual framework. This means that producing units that use identical or similar production processes will be grouped together in NAICS. (2) The system will give special attention to developing production-oriented classifications for (a) new and emerging industries, (b) service industries in general, and (c) industries engaged in the production of advanced technologies. (3) Time series continuity will be maintained to the extent possible. However, changes in the economy and proposals from data users must be considered. In addition, adjustments will be required for sectors where the United States, Canada, and Mexico presently have incompatible industry classification definitions in order to produce a common industry system for all three North American countries. (4) The system will strive for compatibility with the 2-digit level of the International Standard Industrial Classification of All Economic Activities (ISIC, Rev. 3) of the United Nations. ECPC Report No. 3, Summary of Public Responses to the Proposed New North American Industry Classification System, provides a summary of public comments received in response to the July 26, 1994, Federal Register notice. A notice was published in the Federal Register, July 26, 1995, pp. 38436-38452, requesting comment on proposed industry structures for petroleum and coal product manufacturing, chemical manufacturing, and rubber and plastic manufacturing; for broadcasting and telecommunications; and for food services and drinking places and accommodations. A Federal Register notice was published on February 6, 1996, pp. 4524-4578, requesting comment on proposed industry structures for crop production, animal production, forestry and logging, fishing, hunting, and trapping, and support activities for agriculture and forestry; 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. DATES: To ensure consideration and response to all comments on the proposals set forth in this notice, comments must be in writing and should be submitted as soon as possible, but no later than July 29, 1996. This proposed industry system would become effective in the U.S. on January 1, 1997. ADDRESSES: Correspondence about the industry proposals of the NAICS structure announced in this Federal Register notice should be sent to: Carole A. Ambler, Coordinator, Economic Classification Policy Committee, Bureau of the Census, U.S. Department of Commerce, Room 2633-3, Washington, DC 20233, telephone number: (301) 457-2668, FAX number: (301) 457-1343. Correspondence about the NAICS numbering system should be sent to: Jack E. Triplett, Chairman, Economic Classification Policy Committee, Bureau of Economic Analysis (BE-42), U.S. Department of Commerce, Washington, DC 20230, telephone number: (202) 606-9615, FAX number: (202) 606-5311. Copies of all ECPC issues papers, previous Federal Register notices, and ECPC reports are available from the same address. ELECTRONIC AVAILABILITY AND COMMENTS: This document is available on the Internet from the Census Bureau via WWW browser, ftp, and E-mail. To obtain this document via WWW browser, connect to ``http:// www.census.gov'' then select ``Economy,'' then select ``Economy-Wide Programs,'' then select ``NAICS Documents.'' To obtain this document via ftp, log in to ftp.census.gov as anonymous, and retrieve the file ``prop01.txt'' from the ``/pub/epcd/ naics'' directory. (That directory also contains previous NAICS Federal Register Notices and related documents.) To obtain this document via Internet E-mail, send a message to [email protected] with the body text as follows: ``get gatekeeper prop01.txt''. The document will be delivered as a message attachment. Comments may be sent via Internet E-mail to the Census Bureau at [email protected] (do not include any capital letters in the address). Comments received at this address by the dates specified above will be included as part of the official record. FOR FURTHER INFORMATION CONTACT: Carole A. Ambler, Coordinator, Economic Classification Policy Committee, Bureau of the Census, U.S. Department of Commerce, Room 2633-3, Washington, DC 20233, telephone [[Page 26559]] number: (301) 457-2668, FAX number: (301) 457-1343. SUPPLEMENTARY INFORMATION: Structure of Notice There are 20 parts to this notice. Part I includes the proposals for health and social assistance; Part II includes educational services; Part III includes computer and electronic product manufacturing; Part IV includes furniture manufacturing; Part V includes printing and related support activities; Part VI includes professional, scientific, and technical services; Part VII includes performing arts, spectator sports and related industries, museums, historical sites and similar institutions, and recreation, amusement, and gambling; Part VIII includes information; Part IX includes wood product manufacturing, except furniture; Part X includes rental and leasing; Part XI includes repair and maintenance; Part XII includes management and support; Part XIII includes transportation; Part XIV includes retail and wholesale trade; Part XV includes mining; Part XVI includes paper manufacturing; Part XVII includes nonmetallic mineral manufacturing; Part XVIII includes primary metal manufacturing; Part XIX includes miscellaneous manufacturing; and Part XX includes postal service and couriers. Each of the 20 parts of the notice is organized into two sections. The first section includes a copy of the proposed agreement signed by the ECPC, Statistics Canada, and INEGI; the structure of NAICS; and an explanation of the structure. For a number of reasons, NAICS industries do not always provide as much industry detail as has been present in the U.S. SIC. Each country may add additional detailed industries, below the industry level of NAICS, as necessary to meet national needs, so long as this additional detail aggregates to a NAICS industry in order to ensure full comparability among the three countries. The proposed United States NAICS system would include U.S. national industries. These represent important industries in the U.S. that cannot be recognized in the statistical systems of either Canada or Mexico because of size restrictions, confidentiality or other reasons. The second section of each part includes the U.S. detailed industries within NAICS and two comparison tables showing the differences between the 1987 SIC and the 1997 NAICS with United States detail. The NAICS numbering system is still under development; therefore the hierarchical structure is displayed in this document with X's representing the following: X Industry Sector XX Industry Subsector XXX Industry Group XXXX Industry XXXXX U.S. National Industry The terms ``Industry Sector'' and ``Industry Subsector'' are changes from the terms ``Division'' and ``Major Group'' used in the 1987 SIC manual. NAICS Coding System: Issue for Comment The ECPC is requesting public comment on two alternatives for a NAICS coding system--a 5-character alphanumeric system and a 6- character, all numeric system. In the initial stages of its review, the ECPC was informed that the computer systems of some U.S. statistical agencies could not accommodate six characters, which ruled out consideration of a 6-character system. Further investigation has indicated, however, that 6-character fields are possible and may offer certain advantages. Background NAICS is organized in a hierarchical structure, much like the existing U.S. SIC. The 1987 SIC employed a 4-digit coding system, in which the first two digits designate what in NAICS is known as a ``subsector,'' the third digit designates the industry group, and the fourth digit designates the industry. For example, in the 1987 SIC, the two digits 26 designate the manufacture of ``Paper and Allied Products,'' within which the digits 262 designate an industry group titled ``Paper Mills,'' which contains one 4-digit industry, SIC 2621, also titled ``Paper Mills.'' The NAICS coding system must be expanded beyond the four digits used in the SIC for two reasons. First, the NAICS agreements among the ECPC, INEGI, and Statistics Canada permit each country to designate detailed industries, below the level of a NAICS industry, to meet national needs. The United States will have such national industry detail in many places in the new classification, and this national detail can only be accommodated by expanding the coding system to at least five characters. This national industry detail has been shown schematically in previous Federal Register notices. Second, it is desirable that the first character or characters in a coding system designate the sector (the term ``industry sector'' is replacing the term ``division'' used in the 1987 SIC). A modern economy is too complex to be described adequately if the first character of the coding system restricts the number of sectors to nine or ten. The ECPC, INEGI, and Statistics Canada are proposing that NAICS have 18 industry sectors. Accordingly, either the first character of the coding system must be a letter, rather than a number, or two digits must be used to designate the sector in NAICS. The foregoing considerations lead to two options for the coding system in NAICS: (1) A 5-character, alphanumeric coding system, in which the first character (a letter) designates the NAICS sector, and the second, third, fourth, and fifth numerical characters designate, respectively, the subsector, industry group, NAICS industry, and U.S. national industry (if any). (2) A 6-character, all numeric coding system, in which the first two digits designate the NAICS sector, and the third, fourth, fifth, and sixth digits designate, respectively, the subsector, industry group, NAICS industry, and U.S. national industry (if any). To illustrate the differences between the two coding systems, the following table shows a portion of the proposed NAICS structure, with U.S. national detail, for two manufacturing subsectors, and for one non-manufacturing subsector. In the example, hypothetical 5-character and 6-character coding systems are displayed for illustration (the actual positions of these subsectors in the classification system, and hence the actual codes to be assigned to them, will be determined later). Illustrative Portion of the NAICS Structure, Showing Hypothetical Alternative Coding Systems ------------------------------------------------------------------------ 6-character 5-character all numeric alphanumeric system system ------------------------------------------------------------------------ Manufacturing..................... E, F, G 21, 22, 23 Food Manufacturing.............. E1 211 Animal Food Manufacturing..... E11 2111 [[Page 26560]] Animal Food Manufacturing... E111 21111 Dog and Cat Food E1111 211111 Manufacturing. Other Animal Food E1112 211112 Manufacturing. Grain and Oilseed Milling..... E12 2112 Flour Milling and Malt E121 21121 Manufacturing. Flour Milling............. E1211 211211 Rice Milling.............. E1212 211212 Malt Manufacturing........ E1213 211213 Starch and Vegetable Fats E122 21122 and Oils Manufacturing. Soybean Processing........ E1221 211221 Wet Corn Milling.......... E1222 211222 Other Oilseed Processing.. E1223 211223 Edible Fats and Oils E1224 211224 Manufacturing. Breakfast Cereal E123 21123 Manufacturing. Sugar and Confectionery E13 2113 Product Manufacturing. (Classification ... ... continues). Textile Mills................... E2 212 Fibre, Yarn, and Thread Mills. E21 2121 Fiber, Yarn, and Thread E211 21211 Mills. Yarn Spinning Mills....... E2111 212111 Yarn Texturing, Throwing, E2112 212112 and Twisting Mills. Thread Mills.............. E2113 212113 Fabric Mills.................. E22 2122 Broadwoven Fabric Mills..... E221 21221 Narrow Fabric Mills and E222 21222 Schiffli Machine Embroideries. Narrow Fabric Mills....... E2221 212221 Schiffli Machine E2222 212222 Embroideries. Nonwoven Fabric Mills....... E223 21223 Knit Fabric Mills........... E224 21224 Weft Knit Fabric Mills.... E2241 212241 Other Knit Fabric and Lace E2242 212242 Mills. (Classification continues) ... ... Computer and Electronic Product F1 221 Manufacturing. Computer and Peripheral F11 2211 Equipment Manufacturing. Computer and Peripheral F111 22111 Equipment Manufacturing. Electronic Computer F1111 221111 Manufacturing. Computer Storage Device F1112 221112 Manufacturing. Computer Terminal F1113 221113 Manufacturing. Other Computer Peripheral F1114 221114 Equipment Manufacturing. Communication Equipment F12 2212 Manufacturing. Telephone Apparatus F121 22121 Manufacturing. Broadcast and Studio Equipment for Radio, TV, and. Cable Manufacturing......... F122 22122 Other Communication F123 22123 Equipment Manufacturing. Audio and Video Equipment F13 2213 Manufacturing. (Classification continues) ... ... Information....................... J 71 Publishing...................... J1 711 Newspaper, Periodical, Book J11 7111 and Database Publishing. Newspaper Publishing........ J111 71111 Periodical Publishing....... J112 71112 Book Publishing............. J113 71113 Database Publishing......... J114 71114 Other Publishing............ J115 71115 Greeting Card Publishing.. J1151 711151 All Other Publishing...... J1152 711152 (Classification ... ... continues). ------------------------------------------------------------------------ Advantages and Disadvantages of the Two Options 6-Character All Numeric System Advantages An all numeric code can be key-punched more efficiently, i.e., more quickly and accurately. First, a 6-character all numeric code can be keyed faster than a 5-character alphanumeric one. Second, an all numeric code can more readily be verified by the computer system with a check-digit. Third, an all numeric code is less subject to misinterpretation since numerals are more distinct than certain letters (e.g., E & F, M & N, or U & V) even if letters such as I, O, and S are omitted because of their similarity to certain numerals. These productivity advantages reduce the cost of key-punching, compared with a 5-character alphanumeric system. This is the [[Page 26561]] primary advantage of a 6-character, all numeric system to Government agencies. Using an all numeric system allows more flexibility for future expansion of NAICS industry sectors. Under a 5-character alphanumeric system, NAICS would use 22 letters of the alphabet (18 NAICS industry sectors, plus four extra letters for industry sectors, such as Manufacturing, that contain more than ten subsectors). Eliminating the three or four letters that are similar to numerals leaves essentially no room for expansion of the number of NAICS industry sectors under the 5-character alphanumeric proposal, whereas the 6-character all numeric system would permit future expansion of NAICS industry sectors. Most other industry classification systems used throughout the world are all numeric, though most of them are 4- or 5-digit systems. Disadvantages Some of the numerical codes used in the 1987 SIC would be reused for NAICS, but they would describe different levels of aggregation of different industries compared to their use in the 1987 SIC. Even though at any given number of digits, the codes will designate different levels in the two classification systems, reusing codes could lead to some initial confusion about the meaning of a given code. For example, using the hypothetical codes shown above, NAICS code 2111 could represent the industry group for Animal Food Manufacturing, which contains one NAICS industry and two U.S. national industries, while the 1987 SIC code 2111 represents the 4-digit industry for the manufacture of cigarettes. Because expanding a field can be expensive for existing database systems, some users may prefer a 5-character field to one that requires 6-characters, especially since, of the 99 available initial two-digits in a 6-character system, NAICS will only use 22 of them (18 NAICS sectors, plus four extra initial digit pairs for industry sectors, such as Manufacturing, that contain more than ten subsectors). 5-Character Alphanumeric System Advantages Only 5-character fields must be carried in government and nongovernment data bases thereby potentially lessening database-related transition costs to the new system. However, since the field would need to be changed from a numeric to an alphanumeric one, the extent of potential savings is not clear. A 5-character system beginning with a letter provides for unique codes as compared to the 1987 SIC. This will help minimize initial confusion between the new and old systems. Disadvantages A 5-character alphanumeric system is expected to impose substantially higher data entry costs on the U.S. statistical agencies responsible for industry coding. Key-punching of 5-character alphanumeric industry codes takes longer and is less accurate than a 6- character all numeric system for the reasons discussed above under advantages of the 6-character system. Using a 5-character alphanumeric system permits essentially no flexibility for future expansion of NAICS industry sectors. Under a 5-character alphanumeric system, NAICS would use 22 letters of the alphabet (18 NAICS industry sectors, plus four more letters for industry sectors, such as Manufacturing, that contain more than ten subsectors). Eliminating the three or four letters that are similar to numerals leaves essentially no room for expansion of the number of NAICS industry sectors under the 5-character alphanumeric proposal, whereas the 6-character all numeric system would permit future expansion of NAICS industry sectors. Disadvantages of Both Systems With either coding system, multiple initial characters must be used for large sectors, such as manufacturing, transportation, and wholesale and retail trade. Manufacturing, for example, has 21 subsectors in NAICS, so that the 5-character alphanumeric system will require three letters to designate manufacturing and the 6-character all numeric system will require three sets of 2-digit codes. This is an inconvenience in working with the system because tabulating manufacturing will require entering three letters or three 2-digit codes, rather than just one. However, this characteristic is also present in the 1987 SIC system (where initial digits 2 and 3 designate manufacturing). In public comments to the ECPC, some users have requested a more ``user friendly'' coding system than the present 4-digit SIC. Neither of the two systems is an improvement in this respect. ECPC Proposal: Request for Comment The ECPC is proposing the adoption of the 6-character, all numeric coding system for NAICS. The principal reasons for this proposal are the additional key-punching costs to Government agencies if an alphanumeric system were to be adopted as well as the flexibility for future expansion that a 6-character system permits. Other advantages and disadvantages of one coding system over the other seem less compelling because they are more or less offsetting. Of the other countries that are partners in NAICS, Statistics Canada has indicated a strong preference for an all numeric system, and INEGI (which now uses a 6-character numeric system for its industry classification system) has indicated that either system would be acceptable. The ECPC requests comments on its proposal to adopt the 6-digit coding system. Time Series Summary 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 given point in time. The concordance creates a crosswalk between the old and new classification systems. This link between the 1987 U.S. SIC and NAICS (with U.S. national detail) will be developed by the statistical agencies in the U.S. Outreach Activities OMB and the Economic Classification Policy Committee (ECPC) are seeking comments on the proposed NAICS structure for the industries described in this notice. In carrying out its mandate to ensure maximum public participation in the process of constructing NAICS, the ECPC has already discussed many of these industry proposals with industry and user groups and will continue to do so. In addition, the ECPC is replying, on a flow basis as soon as the work is completed for industry subsectors, to respondents to previous Federal Register notices. Thus, this Federal Register notice supplements other ECPC public outreach activities in the development of NAICS. Part I--Proposed New Industry Structure for Ambulatory Health Care Services, Hospitals, Nursing and Residential Care Facilities, and Social Assistance Section A--NAICS Structure North American Industry Classification System [[Page 26562]] (NAICS) Agreement Number 11 This Document represents the proposed agreement on the structure of the North American Industry Classification System (NAICS) for the following industries: Ambulatory Health Care Services Hospitals Nursing and Residential Care Facilities Social Assistance 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 September 27, 1995--September 29, 1995 in Mexico City, Mexico. ------------------------------------------------------------------------ Accepted Signature Date ------------------------------------------------------------------------ Canada.............................. /S/ Jacob Ryten........ 9/29/95 Mexico.............................. /S/ Enrique Ordaz...... 9/29/95 United States....................... /S/ Jack E. Triplett... 9/29/95 ------------------------------------------------------------------------ Attachment 1--NAICS Structure XX Ambulatory Health Care Services XXX Offices of Physicians XXXX Offices of Physicians XXX Offices of Dentists XXXX Offices of Dentists XXX Offices of Other Health Practitioners XXXX Offices of Chiropractors XXXX Offices of Optometrists XXXX Offices of Mental Health Practitioners, except Physicians XXXX Offices of Physical, Occupational, and Speech Therapists and Audiologists XXXX Offices of All Other Health Practitioners XXX Outpatient Care Facilities XXXX Family Planning Centers XXXX Outpatient Mental Health Facilities XXXX Other Outpatient Care Facilities XXX Medical and Diagnostic Laboratories XXXX Medical and Diagnostic Laboratories XXX Home Health Care Services XXXX Home Health Care Services XXX Miscellaneous Ambulatory Health Care Services XXXX Ambulance Services XXXX Other Miscellaneous Ambulatory Health Care Services XX Hospitals XXX General Medical and Surgical Hospitals XXXX General Medical and Surgical Hospitals XXX Psychiatric and Substance Abuse Hospitals XXXX Psychiatric and Substance Abuse Hospitals XXX Specialty Hospitals, Except Psychiatric and Substance Abuse Hospitals XXXX Specialty Hospitals, Except Psychiatric and Substance Abuse Hospitals XX Nursing and Residential Care Facilities XXX Nursing Care Facilities XXXX Nursing Care Facilities XXX Mental Health, Mental Retardation, and Substance Abuse Facilities XXXX Mental Retardation Facilities XXXX Mental Health and Substance Abuse Facilities XXX Community Care Facilities for the Elderly XXXX Community Care Facilities for the Elderly XXX Other Residential Care Facilities XXXX Other Residential Care Facilities XX Social Assistance XXX Individual and Family Services XXXX Child and Youth Services XXXX Services for the Elderly and Persons with Disabilities XXXX Other Individual and Family Services XXX Community Food, Shelter, and Emergency and Relief Services XXXX Community Food Services XXXX Community Housing Services XXXX Emergency and Other Relief Services XXX Job Training and Vocational Rehabilitation Services XXXX Job Training and Vocational Rehabilitation Services XXX Child Day-care Services XXXX Child Day-care Services Attachment 2--North American Industry Classification System Draft Classification for: Ambulatory Health Care Services Hospitals Nursing and Residential Care Facilities Social Assistance Representatives of the statistical agencies of Canada, Mexico and the United States agree to a draft classification for these industries. The draft classification constitutes the sector Health and Social Assistance. The sector is subdivided into 4 subsectors, 18 industry groups, and 30 industries. A General Outline The health and social services industries provide health care and social assistance for individuals. Because it is sometimes difficult to distinguish between the boundaries of health care and social assistance, these industries are grouped together in a new Health and Social Assistance sector. The industries are arranged in order from those providing the most intensive type of health care to those providing minimal health care with social assistance to those providing only social assistance to individuals. Industries in the Ambulatory Health Care Services subsector provide health care services directly or indirectly to ambulatory patients and do not usually provide inpatient overnight services. Health practitioners in this subsector provide outpatient services, with the facilities and equipment not usually being the most significant part of the production process. The Hospitals subsector includes establishments that provide medical, diagnostic, and treatment services that include physician, nursing and other health services to inpatients and the specialized accommodation services required by inpatients. Hospitals also may provide outpatient services as a secondary activity. Establishments in the Hospitals subsector provide inpatient health services, many of which can only be provided using the specialized facilities and equipment that form a significant and integral part of the production process. The Nursing and Residential Care Facilities subsector includes establishments that provide residential care combined with either nursing, supervisory or other types of care as required by the residents. In this subsector, the facilities are a significant part of the production process and the care provided is a mix of health and social services with the health services being largely some level of nursing services. The Social Assistance subsector includes establishments that provide a wide variety of assistance services directly to their clients. These services do not include residential or accommodation services except on a short stay basis. Limitations and Constraints of the Classification The draft classification avoids the problem of the delineation of the boundary between health and social services by incorporating both into a continuum. General Medical and Surgical Hospitals is a very large industry group. NAICS developers considered subdividing this NAICS industry; however, research indicated a wide range of services are typically provided at general medical and surgical hospitals. Some hospitals provide specific advanced medical procedures such as organ transplants that require skilled specialists and special equipment for the operating and recovery phases of the procedures. Other hospitals may offer the same or different advanced medical procedures [[Page 26563]] with their corresponding technologies, along with the less specialized services and less sophisticated technologies that are offered by virtually all hospitals. The mix of services and technologies among hospitals varies significantly along this continuum, but no clear basis for differentiating among general and surgical hospitals based on their mix of services or technological threshold was found. Relationship to ISIC All of the 30 industries included in these subsectors are contained within Division 85, Health and Social Work, in the current International Standard Industrial Classification of All Economic Activities (ISIC, Revision 3) of the United Nations. ISIC Division 85, however, includes veterinary services; in NAICS, veterinary services are in the Professional, Scientific, and Technical Services subsector. Some Changes to the National Classifications Changes to the Canadian SIC include splitting CSIC 8621, Homes for Personal and Nursing Care, into Nursing Care Facilities and Community Care Facilities for the Elderly, and expanding CSIC 8646, Meal Services (Non-Commercial), to include a broader range of food services in the new industry Community Food Services. Community Housing Services and Emergency and Other Relief Services are essentially new industries for Canada. Air ambulance services move out of CSIC 4513, Non-Scheduled Air Transport, Specialty Industry, to Ambulance Services. CSIC 8689, Other Health Laboratories, moves out of this sector. CSIC 8693, Health Care Research Agencies, moves out of this sector. For Mexico, the new Health and Social services sector represents the grouping of medical and social assistance classified in CMAP groups 9231, Medical, Dental, and Veterinary Services (Private Sector); 9232, Medical, Dental, and Veterinary Services (Public Sector); 9241, Social Security Services (Private Sector); and 9242, Social Security Services (Public Sector). Veterinary services are no longer included in this sector. A distinction is made between the public and private sector in CMAP for both health and social services. Because this distinction is not maintained in NAICS, it will be made by Mexico at the national industry level. For the United States, there is a major change to 1987 SIC's 8011, Offices and Clinics of Doctors of Medicine, and 8031, Offices and Clinics of Doctors of Osteopathy. NAICS industry Offices of Physicians now includes both doctors of medicine and doctors of osteopathy. The 1987 distinction between the two types of doctors has been eliminated to recognize the convergence of the two types of medical service. The training and the specialties in which the doctors of medicine and doctors of osteopathy are engaged in many cases are the same and it is more and more common for the two types of doctors to practice together. The U.S. will define a separate national industry for physicians who practice mental health specialties. In addition to this change to 1987 SIC's 8011 and 8031, HMO medical centers and ambulatory surgical and free-standing emergency centers have been moved to NAICS industry Other Outpatient Care Facilities. The U.S. will recognize separate industries for these activities in its national detail. Another major change is the transfer of ambulance services from 1987 SIC's 4119, Local Passenger Transportation, Not Elsewhere Classified, and 4522, Air Transportation, Nonscheduled, into Ambulatory Health Care Services. The medical services included in the Ambulance Services industry are judged to be of greater significance than the vehicle used and the significance of the medical service dwarfs the transportation service also provided. Dental Laboratories, 1987 SIC 8072, are moved from the medical subsector to the Miscellaneous Manufacturing subsector, because making dentures, crowns, bridgework and artificial teeth is similar to other manufacturing processes classified there. Achievements of Objectives The classification meets the objectives for the North American Industry Classification System (NAICS). It is comprised of industries that group establishments with similar production processes, that is, it applies the production-oriented economic concept. In the main, the hierarchical structure of the classification also follows the production concept. The classification achieves comparability for the three participating countries. All countries agree on the definitions of the industries. Other objectives of the NAICS project have also been met. New industries that recognize current health and social service establishments have been established. New and emerging service industries have been created, especially in the area of social assistance. The industries are economically significant. Some NAICS industries are much larger than others, but this was necessary to ensure comparability among the countries or because it was not possible to further subdivide large industries. Finally, disruptions to time series, while they exist, have been minimized to the extent possible. Most of the changes to time series reflect the changing structure of health care across the three countries. For the U.S., additional changes have been made to the national detail to reflect these changes. 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 four NAICS industry subsectors presented in Part 1, Section A--Attachment 1, 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 four NAICS industry subsectors covered in Part I 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 ---------------------------------------------------------------------------------------------------------------- 1987 1997 NAICS and U.S. Status code SIC 1987 SIC description description code ---------------------------------------------------------------------------------------------------------------- XX................. Ambulatory Health Care Services: XXX................ Offices of Physicians: XXXX............... Offices of Physicians: [[Page 26564]] XXXXX.............. Offices of Physicians N *8011 Offices and Clinics of Doctors of except Mental Health Medicine (except mental health Specialists. specialists). ................ *8031 Offices and Clinics of Doctors of Osteopathy (except mental health specialists). XXXXX.............. Offices of Physicians, N *8011 Offices and Clinics of Doctors of Mental Health Medicine (mental health Specialists. specialists). ................ *8031 Offices and Clinics of Doctors of Osteopathy (mental health specialists). XXX................ Offices of Dentists: XXXX............... Offices of Dentists....... E 8021 Offices and Clinics of Dentists. XXX................ Offices of Other Health Practitioners: XXXX............... Offices of Chiropractors.. E 8041 Offices and Clinics of Chiropractors. XXXX............... Offices of Optometrists... E 8042 Offices and Clinics of Optometrists. XXXX............... Offices of Mental Health N *8049 Offices and Clinics of Health Practitioners, except Practitioners, NEC (mental Physicians. health practitioners except physicians). XXXX............... Offices of Physical, N *8049 Offices and Clinics of Health Occupational, and Speech Practitioners, NEC (physical, Therapists and occupational, speech therapists, Audiologists. and audiologists). XXXX............... Offices of All Other Health Practitioners: XXXXX.............. Offices of Podiatrists... E 8043 Offices and Clinics of Podiatrists. XXXXX.............. Miscellaneous Health N *8049 Offices and Clinics of Health Practitioners. Practitioners, NEC (except mental health practitioners, physical, occupational, speech therapists, and audiologists). XXX................ Outpatient Care Facilities: XXXX............... Family Planning Centers... N *8093 Speciality Outpatient Facilities, NEC (family planning centers). ................ *8099 Health and Allied Services, NEC (childbirth preparation). XXXX............... Outpatient Mental Health N *8093 Specialty Outpatient Facilities, Facilities. NEC (mental health facilities). XXXX............... Other Outpatient Care Facilities: XXXXX.............. HMO Medical Centers...... N *8011 Offices and Clinics of Doctors of Medicine (HMO Medical Centers). XXXXX.............. Kidney Dialysis Centers.. E 8092 Kidney Dialysis Centers. XXXXX.............. Ambulatory Surgical and N *8011 Offices and Clinics of Doctors of Freestanding Emergency Medicine (surgical and emergency Centers. centers). XXXXX.............. All Other Outpatient Care N *8093 Specialty Outpatient Facilities, Facilities. NEC (except family planning and mental health centers). XXX................ Medical and Diagnostic Laboratories: XXXX............... Medical and Diagnostic Laboratories: XXXXX.............. Medical Laboratories..... R *8071 Medical Laboratories (except diagnostic imaging centers). XXXXX.............. Diagnostic Imaging N *8071 Medical Laboratories (diagnostic Centers. imaging centers). XXX................ Home Health Care Services: XXXX............... Home Health Care Services: XXXXX.............. Home Health Agencies..... N *8082 Home Health Care Services (home health agencies). XXXXX.............. Other Home Health Care N *8082 Home Health Care Services (except Services. home health agencies). XXX................ Miscellaneous Ambulatory Health Care Services: XXXX............... Ambulance Services........ N *4119 Local Passenger Transportation, NEC (land ambulance) ................ *4522 Air Transportation, Nonscheduled (air ambulance). XXXX............... Other Miscellaneous Health Care Services: XXXXX.............. Blood and Organ Banks.... N *8099 Health and Allied Services, NEC (blood and organ banks). XXXXX.............. All Other Miscellaneous N *8099 Health and Allied Services, NEC Health Care Services. (except blood and organ banks). XX................. Hospitals: XXX................ General Medical and Surgical Hospitals: XXXX............... General Medical and R 8062 General Medical and Surgical Surgical Hospitals. Hospitals. ................ *8069 Specialty Hospitals, Except Psychiatric (childrens' hospitals). XXX................ Psychiatric and Substance Abuse Hospitals: XXXX............... Psychiatric and Substance R 8063 Psychiatric Hospitals Abuse Hospitals. *8069 Specialty Hospitals, Except Psychiatric (substance abuse hospitals). XXX................ Specialty Hospitals, except Psychiatric and Substance Abuse Hospitals: XXXX............... Specialty Hospitals, R *8069 Specialty Hospitals, Except except Psychiatric and Psychiatric (except childrens' Substance Abuse Hospitals. and substance abuse hospitals). XX................. Nursing and Residential Care Facilities: XXX................ Nursing Care Facilities: XXXX............... Nursing Care Facilities... N *8051 Skilled Nursing Care Facilities (except continuing care retirement communities). ................ *8052 Intermediate Care Facilities (except continuing care retirement communities and mental retardation facilities). ................ *8059 Nursing and Personal Care Facilities, NEC (except continuing care retirement communities). [[Page 26565]] XXX................ Mental Health, Mental Retardation, and Substance Abuse Facilities: XXXX............... Mental Retardation N *8052 Intermediate Care Facilities Facilities. (mental retardation facilities). XXXX............... Mental Health and N *8361 Residential Care (mental health Substance Abuse and substance abuse facilities). Facilities. XXX................ Community Care Facilities for the Elderly: XXXX............... Community Care Facilities for the Elderly: XXXXX.............. Continuing Care Retirement N *8051 Skilled Nursing Care Facilities Communities. (continuing care retirement communities). ................ *8052 Intermediate Care Facilities (continuing care retirement communities). ................ *8059 Nursing and Personal Care Facilities, NEC (continuing care retirement communities). XXXXX.............. Homes for the Elderly.... N *8361 Residential Care (homes for the elderly). XXX................ Other Residential Care Facilities: XXXX............... Other Residential Care N *8361 Residential Care (except mental Facilities. health and substance abuse facilities, homes for the elderly). XX................. Social Assistance: XXX................ Individual and Family Services: XXXX............... Child and Youth Services.. N *8322 Individual and Family Social Services (child and youth services). XXXX............... Services for the Elderly N *8322 Individual and Family Social and Persons with Services (services for the Disabilities. elderly and disabled). XXXX............... Other Individual and N *8322 Individual and Family Social Family Services. Services (except services for children, youth, elderly, disabled; food, housing, emergency and relief). XXX................ Community Food, Shelter, and Emergency Relief Services: XXXX............... Community Food Services... N *8322 Individual and Family Social Services (food services). XXXX............... Community Housing Services: XXXXX.............. Temporary Shelter........ N *8322 Individual and Family Social Services (temporary shelter). XXXXX.............. Other Community Housing N *8322 Individual and Family Social Services. Services (housing services except temporary shelter). XXXX............... Emergency and Other Relief N *8322 Individual and Family Social Services. Services (emergency and relief services). XXX................ Job Training and Vocational Rehabilitation Services: XXXX............... Job Training and E 8331 Job Training and Vocational Vocational Rehabilitation Rehabilitation Services. Services. XXX................ Child Day Care Services: XXXX............... Child Day-care Services... E 8351 Child Day Care Services. ---------------------------------------------------------------------------------------------------------------- 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. Table 2 ---------------------------------------------------------------------------------------------------------------- 1987 SIC code 1987 SIC description 1997 U.S. description ---------------------------------------------------------------------------------------------------------------- [email protected] Local Passenger Transportation, Ambulance Services (pt.). NEC. [email protected] Air Transportation, Nonscheduled Ambulance Services (pt.). [email protected] Offices and Clinics of Doctors of Medicine: Clinics of Physicians, Ambulatory Surgical and Freestanding Surgical and Emergency Emergency Centers. Centers. HMO Medical Centers........... HMO Medical Centers. Offices of Physicians, Mental Offices of Physicians, Mental Health Health Specialists. Specialists (pt.). Other Offices of Physicians... Offices of Physicians, Except Mental Health Specialists (pt.). 8021.................................... Offices and Clinics of Dentists. Offices of Dentists. [email protected] Offices and Clinics of Doctors of Osteopathy: Offices of Doctors of Offices of Physicians, Except Mental Osteopathy, Except Mental Health Specialists (pt.). Health. Offices of Doctors of Offices of Physicians, Mental Health Osteopathy, Mental Health Specialists (pt.). Specialists. 8041.................................... Offices and Clinics of Offices of Chiropractors. Chiropractors. 8042.................................... Offices and Clinics of Offices of Optometrists. Optometrists. 8043.................................... Offices and Clinics of Offices of Podiatrists. Podiatrists. 8049.................................... Offices and Clinics of Health Practitioners, Not Elsewhere Classified: Mental Health Practitioners, Offices of Mental Health Except Physicians. Practitioners, Except Physicians. [[Page 26566]] Offices of Physical, Offices of Physical, Occupational, Occupational, and Speech and Speech Therapists and Therapists and Audiologists. Audiologists. Other Offices of Heath Miscellaneous Health Practitioners. Practitioners. [email protected] Skilled Nursing Care Facilities: Continuing Care Retirement Continuing Care Retirement Communities. Communities (pt.). All Other Skilled Nursing Care Nursing Care Facilities (pt.). Facilities. [email protected] Intermediate Care Facilities: Continuing Care Retirement Continuing Care Retirement Communities. Communities (pt.). Mental Retardation Facilities. Mental Retardation Facilities. Other Intermediate Care Nursing Care Facilities (pt.). Facilities. [email protected] Nursing and Personal Care Facilities, Not Elsewhere Classified: Continuing Care Retirement Continuing Care Retirement Communities. Communities (pt.). Other Nursing and Personal Nursing Care Facilities (pt.). Care Facilities. [email protected] General Medical and Surgical General Medical and Surgical Hospitals. Hospitals (pt.). [email protected] Psychiatric Hospitals........... Psychiatric and Substance Abuse Hospitals (pt.). [email protected] Specialty Hospitals, Except Psychiatric:. Children's Hospitals.......... General Medical and Surgical Hospitals (pt.). Psychiatric and Substance Psychiatric and Substance Abuse Abuse Hospitals. Hospitals (pt.). Other Specialty Hospitals..... Specialty Hospitals, Except Psychiatric and Substance Abuse Hospitals. 8071.................................... Medical Laboratories: Diagnostic Imaging Centers.... Diagnostic Imaging Centers. Medical Laboratories, Except Medical Laboratories. Diagnostic Imaging Centers. 8072.................................... Dental Laboratories............. Dental Laboratories (Included in Miscellaneous Manufacturing subsector). 8082.................................... Home Health Care Services: Home Health Agencies.......... Home Health Agencies. Home Health Care Services, Other Home Health Care Services. Except Home Health Agencies. 8092.................................... Kidney Dialysis Centers......... Kidney Dialysis Centers. 8093.................................... Specialty Outpatient Facilities, Not Elsewhere Classified: Family Planning Centers....... Family Planning Centers. Outpatient Mental Health Outpatient Mental Health Facilities. Facilities. Other Specialty Outpatient All Other Outpatient Care Facilities. Facilities. 8099.................................... Health and Allied Services, Not Elsewhere Classified: Blood and Organ Banks......... Blood and Organ Banks. Medical artists............... Graphic Design Services (pt.) (Included in Professional, Scientific, and Technical Services subsector). Medical Photography........... Commercial Photography (pt.) (Included in Professional, Scientific, and Technical Services subsector). Other Health and Allied All Other Miscellaneous Health Care Services. Services. 8322.................................... Individual and Family Social Services: Child and Youth Services...... Child and Youth Services. Community Food Services....... Community Food Services. Community Housing Services, Other Community Housing Services. Except Temporary Shelters. Emergency and Other Relief Emergency and Other Relief Services. Services. Services for the Elderly and Services for the Elderly and Persons Persons with Disabilities. with Disabilities. Temporary Shelter............. Temporary Shelter. Other Individual and Family Other Individual and Family Services. Services. 8331.................................... Job Training and Vocational Job Training and Vocational Rehabilitation Services. Rehabilitation Services. 8351.................................... Child Day-care Services......... Child Day Care Services. 8361.................................... Residential Care: Homes for the Elderly......... Homes for the Elderly. Mental Health and Substance Mental Health and Substance Abuse Abuse Facilities. Facilities. Other Residential Care........ Other Residential Care Facilities. ---------------------------------------------------------------------------------------------------------------- The abbreviation ``pt'' mean ``part of''. @ means a time series break has been created that is greater than 3% of the 1992 revenues for the 1987 SIC industry. Description of Changes to the U.S. System 1. Ambulatory Health Care Services--Sixteen new NAICS or national industries were added to the 1997 industry structure for this subsector to better describe the growing and changing U.S. Ambulatory Health Care Services industries. A number of these new industries were created from 1987 Not Elsewhere Classified (NEC) industries. The new industries are: [[Page 26567]] Offices of Physicians, except Mental Health Specialists from part of 1987 SIC code 8011, Offices and Clinics of Doctors of Medicine, and part of 1987 SIC code 8031, Offices and Clinics of Doctors of Osteopathy. In most cases, these two types of physicians provide the same services. Offices of Physicians, Mental Health Specialists from Part of 1987 SIC code 8011, Offices and Clinics of Doctors of Medicine, and part of 1987 SIC code 8031, Offices and Clinics of Doctors of Osteopathy. Mental health is separated from other physicians because the production process they use most differs from that used by other physicians. Offices of Mental Health Practitioners, Except Physicians from part of 1987 SIC 8049, Offices of Health Practitioners, NEC. This new industry was created because it had a unique production process. Offices of Physical, Occupational, and Speech Therapists and Audiologists from part of 1987 SIC 8049, Offices of Health Practitioners, NEC. This new industry was created because it had a unique production process. Miscellaneous Health Practitioners from part of 1987 SIC 8049, Offices and Clinics of Health Practitioners, NEC. This is one of two new residual categories from the current NEC category. It includes only offices of practitioners. Family Planning Centers from part of 1987 SIC 8093, Specialty Outpatient Clinics, NEC, and part of 1987 SIC 8099, Health and Allied Services, NEC. This new industry was created because it had a unique production process. Outpatient Mental Health Facilities from part of 1987 SIC 8093, Specialty Outpatient Clinics, NEC. This new industry was created because it had a unique production process. HMO Medical Centers from part of 1987 SIC 8011, Offices and Clinics of Doctors of Medicine. The range of services provided in these centers are generally greater than in physician offices. Ambulatory Surgical and Freestanding Emergency Centers from part of 1987 SIC 8011, Offices and Clinics of Doctors of Medicine. This new industry was created because it had a unique production process. All Other Outpatient Care Facilities from part of 1987 SIC 8049, Offices and Clinics of Health Practitioners, NEC. This is the second residual category from the current NEC. It contains only outpatient care facilities. Diagnostic Imaging Centers from part of 1987 SIC 8071, Medical Laboratories. This new industry was created because it had a unique production process. Home Health Agencies from part of 1987 SIC 8082, Home Health Care Services. This industry provides skilled nursing, physical and other therapy, and other services provided in the home. Other Home Health Care Services from part of 1987 SIC 8082, Home Health Care Services. This residual of the current industry includes, for example, home inhalation, infusion, and perfusion therapy. Ambulance Services from parts of 1987 SIC 4119, Local Passenger Transportation, Not Elsewhere Classified, and 1987 SIC 4522, Air Transportation, Nonscheduled. The medical service provided by ambulance personnel is more important than the transportation. Blood and Organ Banks from part of 1987 SIC 8099, Health and Allied Services, NEC. The new industry was created because it had a unique production process. All Other Miscellaneous Health Care Services from part of 1987 SIC 8099, Health and Allied Services, NEC. This is the new residual category for the current 8099. 2. Hospitals--There are no new industries, but some content changes were made to achieve comparability among the three countries. These are: Children's hospitals were moved from 1987 SIC 8069, Specialty Hospitals, except Psychiatric, to General Medical and Surgical Hospitals. These hospitals provide the wide variety of services found in general hospitals. Alcohol and drug abuse hospitals were moved from 1987 SIC 8069, Speciality Hospitals, except Psychiatric, to form part of Psychiatric and Substance Abuse Hospitals to recognize the growing number of these hospitals. 3. Nursing and Residential Care Facilities--The three industries in 1987 SIC Industry Group 805, Nursing and Personal Care Facilities, and 1987 SIC 8361, Residential Care, have been redistributed into five NAICS industries and two additional National industries to better describe this growing activity and to eliminate the distinction made in 1987 based on the Medicare/Medicaid programs. The new industries are: Nursing Care Facilities from parts of 1987 SIC 8051, Skilled Nursing Care Facilities; 1987 SIC 8052, Intermediate Care Facilities; and 1987 SIC 8059, Nursing and Personal Care Facilities, NEC. These industries were combined because many establishments provide care for persons needing varying levels of health care. Mental Retardation Facilities from part of 1987 SIC 8052, Intermediate Care Facilities. This new industry was created because it had a production process not found in nursing homes. Mental Health and Substance Abuse Facilities from part of 1987 SIC 8361, Residential Care. This new industry was created because it had a unique production process. Continuing Care Retirement Communities from parts of 1987 SIC 8051, Skilled Nursing Care Facilities; 1987 SIC 8052, Intermediate Care Facilities; and 1987 SIC 8059, Nursing and Personal Care Facilities, NEC. This new industry was created to handle the growing number of establishments having facilities for various levels of care at one facility, including nursing care, housekeeping, meal service, and other services to assist elderly persons in daily living. Homes for the Elderly from part of SIC 1987 8361, Residential Care. This new industry was created to provide data on establishments known as retirement homes or assisted living facilities, where medical care is incidental. Other Residential Care Facilities from part of 1987 SIC 8361, Residential Care. This is a new residual category from the current 8361, Residential Care. 4. Social Assistance--1989 SIC 8322, Individual and Family Social Services, has been split into seven new industries in two industry groups. These new industries reflect the growing and changing character of social assistance industries. Additional industries for social assistance were requested by several organizations interested in activities of not for profit organizations. These new industries were created to fill that need and because the new industries had different production processes. The industries included in the industry group Individual and Family Services are: Child and Youth Services Services for the Elderly and Persons with Disabilities Other Individual and Family Services The industries under the new industry group Community Food, Shelter, and Emergency Relief Services are: Community Food Services Temporary Shelter (U.S. national industry) Other Community Housing Services (U.S. national industry) Emergency and Other Relief Services Part II--Proposed New Industry Structure for Educational Services Section A--NAICS Structure North American Industry Classification System (NAICS) [[Page 26568]] Agreement Number 12 This Document represents the proposed agreement on the structure of the North American Industry Classification System (NAICS) for the following subsector: Educational Services 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 September 27, 1995-September 29, 1995 in Mexico City, Mexico. ------------------------------------------------------------------------ Accepted Signature Date ------------------------------------------------------------------------ Canada.............................. /S/ Jacob Ryten........ 9/29/95 Mexico.............................. /S/ Enrique Ordaz...... 9/29/95 United States....................... /S/ Jack E. Triplett... 9/29/95 ------------------------------------------------------------------------ Attachment 1--NAICS Structure X Educational Services XXX Elementary and Secondary Schools XXXX Elementary and Secondary Schools XXX Junior Colleges XXXX Junior Colleges XXX Colleges, Universities, and Professional Schools XXXX Colleges, Universities, and Professional Schools XXX Business, Computer and Management Training Schools XXXX Business and Secretarial Schools XXXX Computer Training Schools XXXX Professional and Management Development Training Schools XXX Technical and Trade Schools XXXX Technical and Trade Schools XXX Miscellaneous Schools and Instruction XXXX Fine Arts Schools XXXX Athletic Instruction XXXX Language Schools XXXX Other Miscellaneous Schools and Instruction XXX Educational Support Services XXXX Educational Support Services Attachment 2--North American Industry Classification System Draft Classification for: Educational Services Representatives of the statistical agencies of Canada, Mexico, and the United States agree to a draft industry classification for these industries. This draft classification applies to the subsector Educational Services. This subsector is subdivided into 7 industry groups and 12 industries. A General Outline Educational services industries provide instruction and training in a wide variety of subjects. The industry groups within this subsector (Elementary and Secondary Schools; Junior Colleges; Colleges, Universities, and Professional Schools; Business, Computer and Management Training Schools; Technical and Trade Schools; Miscellaneous Schools and Instruction; and Educational Support Services) are based on the level of educational services provided, and therefore on the level and types of training that are required of the instructors and teachers. The Elementary and Secondary Schools industry group includes establishments that furnish courses that comprise each country's basic preparatory education. Included are parochial schools and military academies furnishing basic preparatory academic courses and secondary schools that furnish both academic and technical courses. Junior Colleges furnish academic or academic and technical courses and grant associate or equivalent academic degrees, diplomas, or certificates that are below the college or university level. This grouping includes community colleges that offer associate degrees. The requirement for admission to an associate or equivalent degree program is at least a high school diploma or equivalent general academic training. Schools having junior college grades in conjunction with secondary grades are classified in Elementary and Secondary Schools. Colleges, Universities, and Professional Schools furnish academic courses and grant academic degrees at the baccalaureate or postgraduate level. The requirement for admission is at least a high school diploma or equivalent general academic training. Business, Computer and Management Training Schools include establishments that provide training in business, secretarial, computer, and related fields. This industry group contains three industries. Business and Secretarial Schools offer courses in office procedures and secretarial and stenographic skills and may offer courses in basic computer skills, word processing, spreadsheet, and desktop publishing. In addition, they offer such classes as office machine operation, reception, communications, and other skills designed for individuals pursuing a clerical or secretarial career or a career in court reporting. Colleges of business within universities are excluded. The Computer Training Schools industry reflects the increasing demand for on-site and specialized computer training. Establishments included in this industry conduct training on all phases of computer activities including computer programming, software packages, computerized business systems, computer electronics technology, computer operations, and local area network management. Establishments that design custom computer systems and then provide training in the use of these custom systems are excluded; these establishments are included in the Professional, Scientific and Technical Services subsector. Professional and Management Development Training Schools include establishments that offer an array of short duration courses and seminars for career development. These establishments may customize or modify their courses to meet the special needs of customers. The courses typically focus on executive management and professional development and may be provided directly to individuals or through employers' training programs. The courses may be offered on-site or off-site. Technical and Trade Schools provide training in a wide variety of technical subjects and trades. Because the nature of technical training varies so widely among the three countries, only one NAICS 4-digit industry is defined within this industry group. Each country may provide national industry detail below the NAICS industry level to reflect technical and trade schools found within each country. The Miscellaneous Schools and Instruction industry group includes 4-digit industries for Fine Arts Schools, Athletic Instruction, and Language Schools. Fine Arts Schools include art schools, drama schools, music schools, professional dance schools, other dance schools and studios. However, schools that offer high school diplomas or academic degrees are placed in the other appropriate industry groups, even if they specialize in fine arts. Athletic Instruction includes establishments that provide training in athletic activities such as baseball, basketball, golf, martial [[Page 26569]] arts, and skiing. Language Schools are establishments that teach foreign languages. They are designed to offer language instruction ranging from conversational skills for personal enrichment to intensive training courses for career or educational opportunities. Skills taught by these establishments may include speaking, reading, and writing in another language. Educational Support Services include educational consultants, educational test development and evaluation services, educational testing services, student exchange programs, educational curriculum development, and other non-instructional services that support educational processes or systems. Establishments primarily engaged in providing job training for the unemployed, underemployed, persons with disabilities, and persons who have a job market disadvantage because of a lack of education, job skills, or experience are classified in the Health and Social Assistance sector. Limitations and Constraints of the Classification Defining educational services industries that are economically significant and homogeneous was often difficult due to lack of data. Some industries that were considered when establishing NAICS industries for educational services are either too small or not specialized in all three countries, for example correspondence schools. It is not possible to use the proposed system to identify specific fields of study because many establishments offer a wide range of courses. Further, it is not possible to differentiate career-oriented training from training taken for personal development as many types of establishments provide both kinds of training. The way activities are defined in establishments differs in the three countries, preventing the establishment of additional NAICS industries. For example, in Mexico there are separate establishments that provide special educational instruction for elementary and secondary school students with learning disabilities while in the United States and Canada, special educational instruction is generally provided by schools serving all students. Also in the United States, establishments providing trade apprenticeship training are separately identifiable, whereas in the other countries this type of training generally occurs ``on the job.'' Changes were required in each country's national classification to reach international comparability. The production principle was applied whenever these changes were required. Relationship to ISIC Most 4-digit NAICS industries in this sector are contained within Division 80, Education, of the current International Standard Industrial Classification of all Economic Activities (ISIC, Revision 3) of the United Nations. Therefore, data tabulated using NAICS also can be tabulated according to ISIC with the following exceptions: (1) Informal education activities below kindergarten (or preschool in Mexico) are often combined with day-care, and are classified with the Child Day-care industry in the NAICS subsector for Social Assistance and (2) NAICS classifies athletic instruction in Educational Services, but ISIC classifies it in 924, Sporting and Other Recreational Activities. There are five 4-digit industries covering educational services in ISIC while NAICS is more detailed, providing for twelve industries. The NAICS industries for Junior Colleges and Colleges, Universities, and Professional Schools are directly comparable to ISIC industry, 8030, Higher Education. In ISIC, Elementary and Secondary Schools are separate industries, while in NAICS they are combined, because in the U.S. data on schools are usually collected from school systems that operate both levels. Some Changes to National Classification In Canada CSIC 8521, Post-Secondary Non-University Education, has been split into Junior Colleges, Business and Secretarial Schools, Computer Training, Technical and Trade Schools, and Fine Arts Schools. Aviation Schools have been moved out of CSIC 4513, Non-Scheduled Air Transport Specialty Industry, to this subsector because they primarily provide instruction, even though aircraft may be required in some portions of the instruction process. Sports instruction has been moved out of CSIC 96, Amusement and Recreational Service Industries, and becomes NAICS industry, Athletic Instruction. CSIC 8599, Other Educational Services, has been split into Language Schools, Other Miscellaneous Instruction and Educational Support Services. Two industries have been moved from Educational Service Industries. These are CSIC 8541, Library Services, to the new Information sector, and CSIC 8551 Museums and Archives, to the new Museums, Historical Sites and Similar Institutions subsector. Both will be published separately. The Mexican CMAP groups 9211, Education Services (Private), and CMAP 9212, Education Services (Public), are combined in the NAICS Educational Services subsector. The NAICS Educational Services subsector does not distinguish between establishments in the private and public sectors. Mexico will make this distinction in its national detail. The only activities that came from another CMAP subsector are athletic instruction and educational support services. For the United States, cosmetology and barber schools moved into Educational Services from 1987 SIC's 7231, Beauty Shops, and 7241, Barber Shops. Dance schools move into Educational Services from 1987 SIC 7911, Dance Studios, Schools, and Halls. A dancing school is not closely related to a ballroom, though both may have dance floors. Athletic instruction moves from 1987 SIC 7999, Amusement and Recreation Services, Not Elsewhere Classified, to Educational Services. Libraries, 1987 SIC 8231, have been moved from Educational Services to the new Information sector, to be published separately. Achievement of Objectives The classification meets the objectives for the North American Industry Classification System (NAICS). It is comprised of industries that group establishments with similar production processes, that is, it applies the production-oriented economic concept. In the main, the hierarchical structure of the classification also follows the production concept. The classification achieves comparability for the three participating countries. All countries agree on the detailed definitions of the industries. However, each country will use terminology that reflects its own educational system. Other objectives of the NAICS project have also been met. New industries have been added to reflect trends in adult education and professional training. The industries are highly specialized and economically significant. This enhances the classification's suitability for sampling and other aspects of survey operations. Finally, disruptions to time series, while they exist, have been minimized and generally result from subdividing existing ``not elsewhere classified'' industries. The major changes are well-defined and can be taken into account in linking time series. 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 [[Page 26570]] NAICS industry subsector presented in Part II, Section A--Attachment 1, 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 II 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 ---------------------------------------------------------------------------------------------------------------- 1987 1997 NAICS and U.S. Status code SIC 1987 SIC description description code ---------------------------------------------------------------------------------------------------------------- XX................. Educational Services: XXX................ Elementary and Secondary Schools: XXXX............... Elementary and Secondary E 8211 Elementary and Secondary Schools. Schools. XXX................ Junior Colleges: XXXX............... Junior Colleges........... E 8222 Junior Colleges and Technical Institutes. XXX................ Colleges, Universities, and Professional Schools: XXXX............... Colleges, Universities, E 8221 Colleges, Universities, and and Professional Schools. Professional Schools. XXX................ Business, Computer, and Management Training Schools. XXXX............... Business and Secretarial E 8244 Business and Secretarial Schools. Schools. XXXX............... Computer Training Schools. E 8243 Data Processing Schools. XXXX............... Professional and N *8299 Schools and Educational Services, Management Development Not Elsewhere Classified Training Schools. (professional and management development training). XXX................ Technical and Trade Schools: XXXX............... Technical and Trade Schools: XXXXX.............. Cosmetology and Barber N *7231 Beauty Shops (beauty and Schools. cosmetology schools). *7241 Barber Shops (barber colleges). XXXXX.............. Vocational and Technical N *8249 Vocational Schools, Not Elsewhere Schools. Classified (vo-tech schools, except high schools). XXXXX.............. Aviation and Flight N *8249 Vocational Schools, Not Elsewhere Training. Classified (aviation schools, excluding flying instruction). *8299 Schools and Educational Services, Not Elsewhere Classified (flying instruction). XXXXX.............. Apprenticeship Training.. N *8249 Vocational Schools, Not Elsewhere Classified (vocational apprenticeship training). XXXXX.............. Other Technical and Trade N *8249 Vocational Schools, Not Elsewhere Schools. Classified (except vo-tech schools, aviation and flight training, apprenticeship training, and driving schools). XXX................ Miscellaneous Schools and Instruction: XXXX............... Fine Arts Schools......... N *8299 Schools and Educational Services, Not Elsewhere Classified (art, drama, and music schools). *7911 Dance Studios, Schools, and Halls (dance instructors, and professional and other dance schools). XXXX............... Athletic Instruction...... N *7999 Amusement and Recreation Services, Not Elsewhere Classified (baseball, basketball, bowling, gymnastic, judo, karate, parachute, scuba and skin diving, skating, ski, swimming, tennis, and other sports instruction; and sports instructional schools and camps). XXXX............... Language Schools.......... N *8299 Schools and Educational Services, Not Elsewhere Classified (language schools). XXXX............... Other Miscellaneous Schools and Instruction:. XXXXX.............. Exam Preparation and N *8299 Schools and Educational Services, Tutoring. Not Elsewhere Classified (exam preparation and tutoring). XXXXX.............. Automobile Driving N *8249 Vocational Schools, Not Elsewhere Schools. Classified (truck driving schools). *8299 Schools and Educational Services, Not Elsewhere Classified (automobile driving instruction). XXXXX.............. All Other Miscellaneous N *8299 Schools and Educational Services, Schools and Instruction. Not Elsewhere Classified (except professional and management training, aviation and flight training, fine arts schools, language schools, exam preparation and tutoring, automobile driving schools, and educational support services). XXX................ Educational Support Services: XXXX............... Educational Support N *8299 Schools and Educational Services Services. Not Elsewhere Classified (except instruction). [[Page 26571]] *8748 Business Consulting Services, Not Elsewhere Classified (educational test development and evaluation services, educational testing services, and educational consultants). ---------------------------------------------------------------------------------------------------------------- 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. Table 2 ---------------------------------------------------------------------------------------------------------------- 1987 SIC code 1987 SIC description 1997 U.S. description ---------------------------------------------------------------------------------------------------------------- [email protected] Beauty Shops: Beauty Shops.................. Beauty Shops (Included in Consumer Services subsector). Beauty and Cosmetology Schools Cosmetology and Barber Schools (pt.). 7241.................................... Barber Shops: Barber Shops.................. Barber Shops (Included in Consumer Services subsector). Barber Colleges............... Cosmetology and Barber Schools (pt.). [email protected] Dance Studios, Schools, and Halls: Dance Studios and Halls....... Miscellaneous Operators of Sports and Recreation Facilities (Included in Recreation, Amusement, and Gambling subsector). Dance Schools................ Fine Arts Schools (pt.). 7999.................................... Amusement and Recreation Athletic Instruction. Services, Not Elsewhere Classified. 8211.................................... Elementary and Secondary Schools Elementary and Secondary Schools. 8221.................................... Colleges, Universities, and Colleges, Universities, and Professional Schools. Professional Schools. 8222.................................... Junior Colleges and Technical Junior Colleges. Schools. 8231.................................... Libraries....................... Libraries and Archives (Included in Information subsector). 8243.................................... Data Processing Schools......... Computer Training Schools. 8244.................................... Business and Secretarial Schools Business and Secretarial Schools. [email protected] Vocational Schools, Not Elsewhere Classified: Trade Schools................. Apprenticeship Training. Truck Drivers Schools......... Automobile Driving Schools (pt.). Aviation Schools.............. Aviation and Flight Training (pt.). Vocational Schools............ Vocational and Technical Schools. Other Technical and Trade Other Technical and Trade Schools. Schools. [email protected] Schools and Educational Services, Not Elsewhere Classified: Flying Instruction............ Aviation and Flight Training (pt.). Automobile Driving Instruction Automobile Driving Schools (pt.). Curriculum Development, Educational Support Services (pt.). Educational. Exam Preparation and Tutoring. Exam Preparation and Tutoring. Art Schools................... Fine Arts Schools (pt.). Language Schools.............. Language Schools. Personal Development Schools.. Professional and Management Development Training (pt.). All Other Schools and All Other Miscellaneous Instruction. Educational Services, Not Elsewhere Classified. [email protected] Business Consulting Services, Educational Support Services (pt.). Not Elsewhere Classified. ---------------------------------------------------------------------------------------------------------------- The abbreviation ``pt'' meams ``part of'' @ means time series break has been created that is greater than 3% of the 1992 revenues for the 1987 SIC industry. Description of Changes to the U.S. System Educational Services--Thirteen new industries are added to the 1997 industry structure for this industry subsector. Most of these new industries have been formed by breaking apart old Not Elsewhere Classified (NEC) industries in the 1987 U.S. SIC. New industries are as follows: Professional and Management Development Training Schools from part of 1987 SIC 8299, Schools and Educational Services, NEC. This new industry was created because it had a unique production function. Cosmetology and Barber Schools from part of 1987 SIC 7231, Beauty Shops, and 1987 SIC 7241, Barber Shops. This was moved to this sector because the primary activity is education, even though these schools give hair cuts. Vocational and Technical Schools from part of 1987 SIC 8249, Vocational Schools, NEC. This new industry was created because it had a unique production function. Aviation and Flight Training from parts of 1987 SIC 8249, Vocational Schools NEC, and 1987 Industry Code 8299, Schools and Educational Services, NEC. This new industry was created because it had a unique production function. Apprenticeship Training from part of 1987 SIC 8249, Vocational Schools, NEC. This new industry was created because it had a unique production function. Other Technical and Trade Schools from part of 1987 SIC 8249, Vocational Schools, NEC. This is the residual five digit category for the four digit industry Technical and Trade Schools. [[Page 26572]] Fine Arts Schools from parts of 1987 SIC 8299, Schools and Educational Services, NEC, and 1987 SIC 7911, Dance Studios, Schools, and Halls. This new industry was created because it had a unique production function. Athletic Instruction from part of 1987 SIC 7999, Amusement and Recreation Services, NEC. This was moved to this sector because the primary activity is education, rather than entertainment. Language Schools from part of 1987 SIC 8299, Schools and Educational Services, NEC. This new industry was created because it had a unique production function. Exam Preparation and Tutoring from part of 1987 SIC 8299, Schools and Educational Services, NEC. This new industry was created because it had a unique production function. Automobile Driving Schools from parts of 1987 SIC 8249, Vocational Schools, NEC, and SIC 8299, Schools and Educational Services, NEC. This new industry was created because it had a unique production function. All Other Miscellaneous Schools and Instruction from part of 1987 SIC 8299, Schools and Educational Services, NEC. This is the residual category for the subsector. Educational Support Services from parts of 1987 SIC 8299, Schools and Educational Services, NEC, and 1987 SIC 8748, Business Consulting Services, NEC. This new industry differs from the others in that it provides support to educational industries, rather than providing instruction. A major change to the 1987 Major Group, Educational Services, is the movement of 1987 SIC 8231, Libraries, to the new Information sector. The number of Educational Services industries increased from 8 to 18. For time series linkage, six of the eight 1987 industries are comparable within three percent of the 1997 industries. Part III--Proposed New Industry Structure for Computer and Electronic Product Manufacturing Section A--NAICS Structure North American Industry Classification System (NAICS) Agreement Number 13 This Document represents the proposed agreement on the structure of the North American Industry Classification System (NAICS) for the following subsector: Computer and Electronic Product Manufacturing 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 September 27, 1995-September 29, 1995 in Mexico City, Mexico. ------------------------------------------------------------------------ Accepted Signature Date ------------------------------------------------------------------------ Canada.............................. /S/ Jacob Ryten........ 9/29/95 Mexico.............................. /S/ Enrique Ordaz...... 9/29/95 United States....................... /S/ Jack E. Triplett... 9/29/95 ------------------------------------------------------------------------ Attachment 1--NAICS Structure XX Computer and Electronic Product Manufacturing XXX Computer and Peripheral Equipment Manufacturing XXXX Computer and Peripheral Equipment Manufacturing XXX Communications Equipment Manufacturing XXXX Telephone Apparatus Manufacturing XXXX Broadcast and Studio Equipment for Radio, TV, and Cable Manufacturing XXXX Other Communications Equipment Manufacturing XXX Audio and Video Equipment Manufacturing XXXX Audio and Video Equipment Manufacturing XXX Semiconductor and Electronic Component Manufacturing XXXX Semiconductor and Electronic Component Manufacturing XXX Navigational, Measuring, Medical and Control Instrument Manufacturing XXXX Navigational, Measuring, Medical and Control Instrument Manufacturing XXX Manufacturing and Reproduction of Magnetic and Optical Media XXXX Manufacturing and Reproduction of Magnetic and Optical Media (Includes the manufacturing of blank audio and video tapes, diskettes and CD-ROMs, and reproduction of software, audio, video, and multimedia products) Attachment 2--North American Industry Classification System Draft Classification for: Computer and Electronic Product Manufacturing Representatives of the statistical agencies of Canada, Mexico, and the United States agree to a draft industrial classification for these industries. The draft classification provides for the subsector, Computer and Electronic Product Manufacturing. This subsector is further subdivided into six industry groups and eight industries. The subsector will be part of the Manufacturing sector of the classification. A General Outline The Computer and Electronic Product Manufacturing industries produce computers, computer peripherals, communications equipment, and similar electronic products, together with components for such products. The treatment of this subsector in NAICS differs substantially from past national classifications in all three countries, and also from other international classifications. First, in NAICS the computer and electronic product manufacturing industries have been elevated to a separate subsector that brings together in the classification the manufacture of electronic products and their components. In previous national classification systems, and in the International Standard Industrial Classification of All Economic Activities (ISIC, Revision 3) of the United Nations, these industries are placed in machinery industries or with electrical equipment. Computer and electronic product manufacturing industries have been elevated in the hierarchy of NAICS because of the economic importance they have attained, because their rapid growth suggests that they will become even more important in the economies of all three North American countries in the future, and because their manufacturing processes are fundamentally different from the manufacturing processes of other machinery and electrical components with which they have been grouped in the past, and are grouped in ISIC. Computers, communications equipment, and other electronic devices can of course be regarded as types of machines, which has been the view embodied in past classification systems. However, in NAICS the application of mechanical principles defines the Machinery subsector, because it describes the production processes (gear cutting and so forth) that must be used to manufacture machinery that functions on mechanical principles. Mechanical principles are not significant in the operation of computers and other electronic devices, and the production of computers, communications equipment and other electronic devices is not characterized by the processes that are used in the Machinery subsector. Instead, the design and use of integrated circuits and the application [[Page 26573]] of highly specialized miniaturization technologies are common elements in the production technologies of the Computer and Electronic Product Manufacturing subsector. The production processes are in a constant state of technological development, such that heavy research and development expenditures are necessary to cope with rapid obsolescence of tangible and intangible assets. The manufacture of these products is grouped together because similar production processes are used. A second substantive difference between NAICS and most other classification systems involves the grouping itself. In NAICS, the manufacture of integrated circuits and related electronic components is placed in the same subsector as the manufacturing of computers, communications equipment and other end products for which these components are an essential part of the end-product technology. Moreover, NAICS combines in the same subsector end products that have different uses--for example, computers, communications equipment, and audio equipment--but have similar and converging technologies. Convergence of technology motivates the NAICS groupings. Digitalization of sound recording, for example, causes both the medium (the ``compact disk'') and the equipment to resemble the technologies for recording, storing, transmitting and manipulating data. Communications technology and equipment have been converging with computer technology. Machines already exist that can send fax messages, copy electronically, and print documents. Transmission technology may take the form of a dedicated, separately-housed machine (end product), or the same technology may be incorporated into a board mounted inside a computer (in which case it is technically an electronic component); thus, the component/end product distinction no longer justifies separating electronic components in a separate part of the classification system from electronic end products. Combining in the same subsector the production of equipment designed for different end uses, and also combining in the same subsector the components with the end-use equipment, is justified by rapid convergence in the production technologies and by the expected continued convergence of technology. When technologically related components are in the same sector, it makes it easier to adjust the classification for future changes, without needing to redefine its basic structure. The creation of the Computer and Electronic Product Manufacturing subsector will assist in delineating new and emerging industries because the activities that will serve as the probable sources of new industries--such as computer manufacturing and communications equipment manufacturing, or computers and audio equipment--are brought together. As new activities emerge, they are less likely therefore to cross the subsector boundaries of the classification. In addition, the three countries put a priority in NAICS on the delineation of industries engaged in the production of advanced technologies. The creation of this subsector is a response to that priority. It groups activities that are constantly developing and applying new scientific and engineering knowledge. Though the three countries' statistical agencies agree that the growth of computer and electronic components in all three countries is likely to be significant in the future, and that accordingly it merits treatment as a subsector in NAICS, many differences currently exist in the degrees of specialization and differentiation in the three countries. The United States has more diversification and more specialization in these high technology sectors than does either Canada or Mexico. For this reason, it was necessary to specify NAICS 4-digit industries in this sector at a relatively broad level of detail. By setting up a forward-looking classification, it will be easier to subdivide NAICS 4-digit industries in the future, as the sector expands in all three countries, without requiring major shifts in the classification system. This is especially important in view of the fact that the technologies that are common across all of the industries in this subsector may converge in the future as well as differentiate. The Computer and Electronic Product Manufacturing subsector is subdivided into six industry groups. Computer and Peripheral Equipment Manufacturing comprises the production of computers and associated products such as storage devices and monitors. Communication Equipment Manufacturing includes the manufacture of telephone apparatus and radio and television studio and broadcast equipment. Audio and Video Equipment Manufacturing covers household and commercial radios, televisions, video equipment and similar articles. Semiconductor and Electronic Component Manufacturing includes the manufacture of a broad range of components used as parts in this subsector. The loading of circuit boards is classified here. Navigational, Measuring, Medical and Control Instrument Manufacturing includes the manufacture of such products as radar and sonar equipment and industrial process control equipment. The sixth industry group, Manufacturing and Reproduction of Magnetic and Optical Media, includes the production of media such as video tapes and CD-ROMs, and the mass duplication of these media. It should be noted that the manufacture of packaged software is placed in this sector; however, the publishing of software, and its distribution electronically, is placed in the new NAICS Information sector, to be published separately, while traditional custom applications of software to client specification are in the Professional, Scientific and Technical Services subsector. These changes were made to represent better the different ways that software is produced and distributed. Sources within the industry and without have noted that the attempt, in past classification systems, to locate all software in a single portion of the classification system (the Services sector, or the Manufacturing sector) obliterates useful distinctions in software production and distribution, and tends, whatever the decision, to become rapidly obsolete as the nature and use of software changes. The NAICS structure is intended to facilitate the production of data on such changes, rather than obliterating them. Consideration was given to subdividing this industry. Two possibilities were considered. Establishments could be distinguished based on the type of media, for example, CD-ROMs and diskettes or on the type of application, for example software and entertainment. This was not done for two reasons. First, the production process is often the same for a particular medium regardless of the application. For example, a blank CD-ROM can be used for recording music or for recording software. The format used for recording music CD-ROMs is also commonly used in multimedia software applications. Secondly, some establishments combine the production of the possible subdivisions. Establishments exist that produce both diskettes and CD-ROMs. These technological and establishment organization issues precluded a subdivision of the industry for NAICS. It is also the case that any subdivisions would be very small in Canada and Mexico. [[Page 26574]] Limitations and Constraints of the Classification In the Computer and Electronic Product Manufacturing subsector, most activities that were identified in one country exist in the others. However, as noted above, often an activity is not economically significant to the same degree in all countries. For example, a broad NAICS Computer and Peripheral Equipment Manufacturing industry was created because in Canada and Mexico establishments that primarily manufacture computers also produce peripherals to a significant degree. In Canada, a computer manufacturing industry would have a specialization ratio of only 70%. In addition, there is evidence that the lines between computer and peripheral equipment manufacturing are becoming less precise even in the U.S. The U.S. specialization ratio for computer manufacturing declined from 87% to 82% between 1987 and 1992. As another example, a relatively broad NAICS industry was created for Semiconductor and Electronic Component Manufacturing, partly because any possible subdivisions are small or confidential in Canada and Mexico. Each country may publish additional national industries that comprise subdivisions of NAICS industries, to present data for activities that are nationally significant. Though these national industries are also constrained by the desire to preserve time series comparability within each country's statistics, so far as possible, the three countries are committed to increased international comparability of industrial statistics in these high technology sectors, as development in the three economies makes it feasible. Bringing electronic components and end products together in the classification has inevitably produced some anomalies at the boundary of the sector. For example, most of the traditional instrument industries have been located in this subsector because electronic measuring devices and instruments have rapidly displaced mechanical and electrical types that served similar functions. It was, however, not practical to split off all of the traditional forms of instruments, partly for the sake of preserving time series, partly because the establishments themselves have shifted from the old to the new technology, and partly because the rapid eclipse of some traditional instrument types may mean that an industry or industries for mechanical instrument manufacturing (in Miscellaneous Manufacturing) would soon become obsolete, even if it were established in NAICS. As a consequence, however, some activities that are neither electronic nor ``high tech'' (watch springs, for example) appear anomalously in this subsector. For those users requiring detailed commodity information, each country will publish information on the products of these industries. Efforts are also underway to harmonize the commodity classifications to allow for greater comparability of these statistics. Relationship to ISIC The Computer and Electronic Product Manufacturing subsector does not closely match any existing Division of the current International Standard Industrial Classification of all Economic Activities (ISIC, Revision 3) of the United Nations. Computers and peripherals are classified in ISIC Division 30, Manufacture of Office, Accounting and Computing Machinery. Communications equipment, audio and video equipment and most electronic components are in ISIC Division 32, Manufacture of Radio, Television and Communication Equipment and Apparatus. Navigational, measuring and controlling equipment are included in ISIC Division 33, Manufacture of Medical, Precision and Optical Instruments, Watches and Clocks. Other activities in this subsector are classified in three additional ISIC Divisions. However, of the eight NAICS 4-digit industries in this subsector, six of them are each contained entirely within a single ISIC Division. The other two NAICS industries cross two ISIC Divisions: Semiconductor and Electronic Component Manufacturing is largely included in ISIC Division 32, but includes the manufacture of electronic coils, transformers, connectors and switches that are classified in ISIC Division 31, Manufacture of Electrical Machinery and Apparatus, NEC. Manufacturing and Reproduction of Magnetic and Optical Media is split between ISIC Division 24, Manufacture of Chemicals and Chemical Products (the manufacture of media) and ISIC Division 22, Publishing, Printing and Reproduction of Recorded Media (mass duplication); in North America, these activities take place in the same establishments, so they are combined in NAICS. Most of ISIC Division 32 is included in this subsector. However, the other ISIC Divisions (31, 24 and 22) linked to the Computer and Electronic Component Manufacturing subsector all have significant activities that are classified elsewhere in NAICS. Some Changes to the National Classifications For all countries, the creation of the Computer and Electronic Product Manufacturing subsector represents a significant change to the structure of the current national classifications. For Canada, the subsector is largely the sum of three industry groups in Electrical and Electronic Products Industries (CSIC 334, 335 and 336) and instruments now in Other Manufacturing Industries (part of 391). The amount of detail of this NAICS subsector is less than that contained in the Canadian classification. For Mexico, the Computer and Electronic Product Manufacturing subsector has coverage similar to the Mexican classification's Manufacture and Assembly of Electronic Radio, Television, Communications and Medical Equipment (CMAP 3832), combined with the computers and peripherals activities from Manufacture and Assembly of Office Calculating and Data Processing Machines (3823). The amount of detail of this NAICS subsector is similar to that of these areas of the Mexican classification. For the United States, this subsector includes activities from three major groups. Computers and peripherals are now in Computer and Office Equipment, 1987 Industry Group 357; instruments are now a large part of 1987 SIC Major Group 38, Measuring, Analyzing, and Controlling Instruments; Photographic, Medical and Optical Goods; Watches and Clocks; and the remaining NAICS activities in this subsector are largely classified in 1987 Major Group 36, Electronic and Other Electric Equipment (especially 365, 366 and 367). NAICS provides much less industry detail than the 1987 U.S. SIC. However, the U.S. national industries will provide similar detail below the NAICS industry level. Achievement of Objectives The classification meets the objectives for the North American Industry Classification System (NAICS). It includes industries that group establishments with similar production processes, that is, it applies the production-oriented economic concept. The hierarchical structure of the classification also follows the production concept. For example, computer peripherals and electronic components are both used in the manufacture of computers; however, components are separated from peripherals in the hierarchy because the production process used in the manufacture of peripherals is more like [[Page 26575]] that of computers, with assembly of parts being important, while the manufacture of electronic components is driven by miniaturization techniques. The industries have high specialization ratios, and they are economically significant. Some are much larger than others, but this was necessitated by the considerations discussed above under Limitations and Constraints of the Classification. The classification is still suitable for sampling, data-publishing and other aspects of survey operations. Finally, while disruptions to time series exist, they are mostly at the level of the aggregation structure. The statistical agencies can develop statistical ``links'' to enable the re-tabulation of time series on the new NAICS classification structure. The classification achieves comparability for the three participating countries. Based on existing data, all three countries expect to be able to publish data regularly at the industry (4-digit) level of the structure. All countries agree on the detailed definitions of the industries. 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 III, Section A--Attachment 1, 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 subsector covered in Part III 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 ---------------------------------------------------------------------------------------------------------------- 1987 1997 NAICS & U.S. description Status code SIC 1987 SIC description code ---------------------------------------------------------------------------------------------------------------- XX................. Computer and Electronic Product Manufacturing: XXX................ Computer and Peripheral Equipment Manufacturing: XXXX............... Computer and Peripheral Equipment Manufacturing: XXXXX.............. Electronic Computer E 3571 Electronic Computers. Manufacturing. XXXXX.............. Computer Storage Device E 3572 Computer Storage Devices. Manufacturing. XXXXX.............. Computer Terminal E 3575 Computer Terminals. Manufacturing. XXXXX.............. Other Computer Peripheral R 3577 Computer Peripheral Equipment, Equipment Manufacturing. NEC. *3578 Calculating and Accounting Machines, Except Electronic. Computers (point of sale terminals and fund transfer devices). *3699 Electrical Machinery Equipment and Supplies, NEC (bar code scanners). XXX................ Communication Equipment Manufacturing: XXXX............... Telephone Apparatus R *3661 Telephone and Telegraph Apparatus Manufacturing. (except telephone transformers and external PC consumer modems). XXXX............... Broadcast and Studio R 3663 Radio and Television Broadcasting Equipment for Radio, TV, and Communication Equipment. and Cable Manufacturing. *3679 Electronic Components, NEC (communication equipment). XXXX............... Other Communication E 3669 Communications Equipment, NEC. Equipment Manufacturing. XXX................ Audio and Video Equipment Manufacturing: XXXX............... Audio and Video Equipment E 3651 Household Audio and Video Manufacturing. Equipment. XXX................ Semiconductor and Electronic Component Manufacturing: XXXX............... Semiconductor and Electronic Component Manufacturing: XXXXX.............. Electron Tube E 3671 Electron Tubes. Manufacturing. XXXXX.............. Printed Circuit Board E 3672 Printed Circuit Boards. Manufacturing. XXXXX.............. Semiconductor and Related E 3674 Semiconductors and Related Device Manufacturing. Devices. XXXXX.............. Electronic Capacitor E 3675 Electronic Capacitors. Manufacturing. XXXXX.............. Electronic Resistor E 3676 Electronic Resistors. Manufacturing. XXXXX.............. Electronic Coil, R *3661 Telephone and Telegraph Apparatus Transformer, and Other (telephone transformers). Inductor. Manufacturing. 3677 Electronic Coils, Transformers, and Other Inductors. *3825 Instruments for Measuring and Testing of Electricity and Electrical Signals (portable instrument transformers). XXXXX.............. Electronic Connector E 3678 Electronic Connectors. Manufacturing. XXXXX.............. Other Electronic R *3661 Telephone and Telegraph Apparatus Component Manufacturing. (external PC consumer modems). *3679 Electronic Components, NEC (other electronic components including loaded printed circuit boards). XXX................ Navigational, Measuring, Medical, and Control Instrument Manufacturing: XXXX............... Navigational, Measuring, Medical, and Control Instrument Manufacturing: [[Page 26576]] XXXXX.............. Search, Detection, E 3812 Search, Detection, Navigation, Navigation, Guidance, Guidance, Aeronautical, and Aeronautical, and Nautical Systems and Nautical System and Instruments. Instrument Manufacturing. XXXXX.............. Automatic Control for E 3822 Automatic Controls for Regulating Regulating Residential Residential and Commercial and Commercial Environments and Appliances. Environment and Appliance Manufacturing. XXXXX.............. Industrial Instrument for E 3823 Industrial Instruments for Measurement, Display, Measurement, Display, and and Control of Process Control of Process Variables; Variables, and Related and Related Products. Products. XXXXX.............. Totalizing Fluid Meter E 3824 Totalizing Fluid Meters and and Counting Device Counting Devices. Manufacturing. XXXXX.............. Instruments for Measuring R *3825 Instruments for Measuring and and Testing of Testing of Electricity and Electricity and Electrical Signals (except Electrical Signal portable instrument Manufacturing. transformers). XXXXX.............. Analytical Instrument E 3826 Laboratory Analytical Manufacturing. Instruments. XXXXX.............. Other Measuring and R *3829 Measuring and Controlling Controlling Device Devices, NEC (except medical Manufacturing. thermometers). XXXXX.............. Watch, Clock, and Part R *3495 Wire Springs (clock and watch Manufacturing. springs). *3579 Office Machines, NEC (time clocks and other time recording devices). 3873 Watches, Clocks, Clockwork Operated Devices, and Parts. XXXXX.............. X-Ray Apparatus and Tubes E 3844 X-Ray Apparatus and Tubes and and Related Irradiation Related Irradiation Apparatus. Apparatus. XXXXX.............. Electromedical and R *3842 Orthopedic, Prosthetic, and Electrotherapeutic Surgical Appliances and Supplies Apparatus. (electronic hearing aids). 3845 Electromedical and Electrotherapeutic Apparatus. XXX................ Manufacturing and Reproduction of Magnetic and Optical Media: XXXX............... Manufacturing and Reproduction of Magnetic and Optical Media: XXXXX.............. Reproduction of Software. R *7372 Prepackaged Software (reproduction of software). XXXXX.............. Prerecorded Compact Disk, N *3652 Phonograph Records and Except Software, Tape, Prerecorded Audio Tapes and and Record Manufacturing. Disks (reproduction of all other media except video). *7819 Services Allied to Motion Picture Production (Reproduction of video). XXXXX.............. Magnetic and Optical E 3695 Magnetic and Optical Recording Recording Media Media. Manufacturing. ---------------------------------------------------------------------------------------------------------------- The definitions of status codes are as follows: E--existing; N--new industry; R--revised industry; and * means ``part of''. The abbreviation NEC is used for Not Elsewhere Classified. Table 2 ---------------------------------------------------------------------------------------------------------------- 1987 SIC code 1987 SIC description 1997 U.S. description ---------------------------------------------------------------------------------------------------------------- 3495.................................... Wire Springs: Clock and Watch Springs....... Watch, Clock and Part Manufacturing (pt). Wire Springs, Except Clock and Wire Spring Manufacturing (Included Watch Springs. in Fabricated Metal Product Manufacturing subsector). 3571.................................... Electronic Computers............ Electronic Computer Manufacturing. 3572.................................... Computer Storage Devices........ Computer Storage Device Manufacturing. 3575.................................... Computer Terminals.............. Computer Terminal Manufacturing. 3577.................................... Computer Peripheral Equipment, Other Computer Peripheral Equipment NEC. Manufacturing (pt). [email protected] Calculating and Accounting Machines, Except Electronic Computers: Point of Sales Terminals and Other Computer Peripheral Equipment Fund Transfer Devices. Manufacturing (pt). Calculating and Accounting Office Machinery Manufacturing (pt) Machines, Except Point of (Included in Machinery Sales Terminals and Fund Manufacturing subsector). Transfer Devices. [email protected] Office Machines, NEC: Pencil Sharpeners and Staplers Lead Pencils, Crayons and Artists' Supplies (pt) (Included in Miscellaneous Manufacturing subsector). Timeclocks and Other Time Watch, Clock, and Part Manufacturing Recording Devices. (pt). Other......................... Office Machinery Manufacturing (pt) (Included in Machinery Manufacturing subsector). 3651.................................... Household Audio and Video Audio and Video Equipment Equipment. Manufacturing. [email protected] Phonograph Records and Prerecorded Audio Tapes and Disks: Record Publishing............. (Included in Information subsector). [[Page 26577]] Reproduction of All Other Prerecorded Compact Disk, Tape and Media Except Video. Record Manufacturing (pt). External PC Consumer Modems... Other Electronic Component Manufacturing (pt). Telephone Transformers........ Electronic Coil, Transformer, and Other Inductor Manufacturing (pt) (Included in Electrical Equipment, Appliance and Component Manufacturing subsector). Telephone and Telegraph Telephone Apparatus Manufacturing. Apparatus, Except Telephone Transformers and Consumer External Modems. 3663.................................... Radio and Television Broadcast and Studio Equipment for Broadcasting and Communication Radio, TV, and Cable (pt) Equipment. Manufacturing. 3669.................................... Communications Equipment, NEC... Other Communication Equipment Manufacturing. 3671.................................... Electron Tubes.................. Electron Tube Manufacturing. 3672.................................... Printed Circuit Boards.......... Printed Circuit Board Manufacturing. 3674.................................... Semiconductors and Related Semiconductor and Related Device Devices. Manufacturing. 3675.................................... Electronic Capacitors........... Electronic Capacitor Manufacturing. 3676.................................... Electronic Resistors............ Electronic Resistor Manufacturing. 3677.................................... Electronic Coils, Transformers, Electronic Coil, Transformer, and and Other Inductors. Other Inductor Manufacturing (pt). 3678.................................... Electronic Connectors........... Electronic Connector Manufacturing. 3679.................................... Electronic Components, NEC: Communication Equipment....... Broadcast and Studio Equipment for Radio, TV and Cable Manufacturing (pt). Electronic Control Modular Electrical Equipment for Internal Chips for Motor Vehicles. Combustion Engine Manufacturing (pt) (Included in Transportation Equipment Manufacturing subsector). Other Electronic Components Other Electronic Component Including Loaded PC Boards. Manufacturing (pt). 3695.................................... Magnetic and Optical Recording Magnetic and Optical Recording Media Media. Manufacturing, [email protected] Electrical Machinery, Equipment, and Supplies, NEC: Bar Code Scanners............. Other Computer Peripheral Equipment Manufacturing (pt). Christmas Tree Lighting Sets Other Lighting Equipment and Electric Insect Lamps. Manufacturing (pt) (To Be Included in Electrical Equipment, Appliance and Component Manufacturing subsector). Electric Outboard Motor;...... Other Engine Manufacturing (pt) (Included in Machinery Manufacturing subsector). Lasers........................ Classified according to function. Other Electrical Machinery, Other Electrical Industrial Equipment, and Supplies. Apparatus Manufacturing (pt) (Included in Electrical Equipment, Appliance, and Component Manufacturing subsector). 3812.................................... Search, Detection, Navigation, Search, Detection, Navigation, Guidance, Aeronautical, and Guidance, Aeronautical, and Nautical Systems and Nautical System and Instrument Instruments. Manufacturing. 3822.................................... Automatic Controls for Automatic Control for Regulating Regulating Residential and Residential and Commercial Commercial Environment and Environment and Appliance Appliances. Manufacturing. 3823.................................... Industrial Instruments for Industrial Instrument for Measurement, Display, and Measurement, Display, and Control Control of Process Variables; of Process Variables; and Related and Related Products. Product Manufacturing. 3824.................................... Totalizing Fluid Meters and Totalizing Fluid Meter and Counting Counting Devices. Device Manufacturing. 3825.................................... Instruments for Measuring and Testing of Electricity and Electrical Signals: Portable Instrument Electronic Coil, Transformer, and Transformers. Other Inductor Manufacturing (pt). Except Portable Instrument Instruments for Measuring and Transformers. Testing of Electricity and Electrical Signal Manufacturing. 3826.................................... Laboratory Analytical Analytical Instrument Manufacturing. Instruments. 3829.................................... Measuring and Controlling Devices, NEC: Medical Thermometers.......... Surgical Appliance and Supply Manufacturing (pt) (Included in Miscellaneous Manufacturing Subsector). Except Medical Thermometers... Other Measuring and Controlling Device Manufacturing. [email protected] Orthopedic, Prosthetic, and Surgical Appliances and Supplies: Electronic Hearing Aids....... Electromedical and Electrotherapeutic Apparatus (pt.). Other......................... Surgical Appliance and Supply Manufacturing (pt.) (To be Included in Miscellaneous Manufacturing subsector). 3844.................................... X-Ray Apparatus and Tubes and X-Ray Apparatus and Tubes and Related Irradiation Apparatus. Related Irradiation Apparatus. 3845.................................... Electromedical and Electromedical and Electrotherapeutic Apparatus. Electrotherapeutic Apparatus (pt.). 3873.................................... Watches, Clocks, Clockwork Watch, Clock, and Part Manufacturing Operated Devices and Parts. (pt). [email protected] Prepackaged Software: Reproduction of Software...... Reproduction of Software. [[Page 26578]] Other......................... (Included in Information subsector). [email protected] Services Allied to Motion Picture Production Reproduction of Video......... Prerecorded Compact Disk, [Text truncated at 120,000 characters. The full text is on the page linked above.] --- Source: Frix Law Library, https://www.frixlaw.com/law-library/documents/fr%3A96-13039. Public record. Not legal advice.