Implementing the North American Industry Classification System at BLS
December, 2001, Vol. 124, No. 12
James A. Walker and John B. Murphy
Recent years have brought many changes in the U.S. economy. The rapid development of telecommunications and the Internet are only two examples of an incredible continuing evolution and progressively changing business environment. Correspondingly, economists and statisticians are improving their tools for measuring the economy. One basic tool is the classification of businesses by industry. Since the 1930s, government statistical programs have published industry data based on the Standard Industrial Classification (SIC) system. Now, these government programs will provide industry statistics based on the North American Industry Classification System (NAICS).1
The SIC system, originally designed in the 1930s, has been revised and updated periodically to reflect changes in the U.S. economy. The last revision was in 1987 when a number of new industries such as computer and software stores, video tape rental stores, and plastic bottle manufacturers were added.2 However, the SIC system still focuses on the manufacturing sector of the economy, and provides insufficient detail for the now dominant service sector. Newly developed industries in information services, health care delivery, and even high-tech manufacturing cannot be adequately studied under the SIC system because they are not separately identified at the industry level. Thus, a new system has been developed that captures the dynamism of the 21st century economy and changes as industry activity develops. The Office of Management and Budget (OMB) announced adoption of NAICS in 1997,3 and in 2001, announced a revised NAICS for 2002.4 This article discusses the changes to NAICS as reflected in the NAICS 2002 manual. It also profiles NAICS—discussing its structure, issues confronting data users and collectors, and the implementation schedule for programs at the Bureau of Labor Statistics. A companion article on pages 22–31 provides a first look at employment and wage data based on NAICS.5
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1 See North American Industry Classification System—United States, 1997 (Executive Office of the President, Office of Management and Budget).
2 See Standard Industrial Classification Manual 1987 (Executive Office of the President, Office of Management and Budget).
3 See Administration introduces new industry classification system (Executive Office of the President, Office of Management and Budget, April 8, 1997). For a Bureau of Labor Statistics perspective on NAICS, see John B. Murphy, "Introducing the North American Industry Classification System," Monthly Labor Review, July 1998, pp. 43–47.
4 See North American Industry Classification System—Revision for 2002 (Executive Office of the President, Office of Management and Budget). The new manual will be released by spring 2002 and may be ordered from the National Technical Information Service, 5285 Port Royal Road, Springfield, VA 22161
5 See David R. H. Hiles, "A first look at employment and wages using NAICS," this issue, pages 22–31.
Related Monthly Labor Review articles
Introducing the North American Industry Classification System.—July 1998.
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