[Federal Register: May 28, 1996 (Volume 61, Number 103)] [Notices] [Page 26557-26668] From the Federal Register Online via GPO Access [wais.access.gpo.gov] [[Page 26557]] _______________________________________________________________________ Part II Office of Management and Budget _______________________________________________________________________ Economic Classification Policy Committee: Standard Industrial Classification Replacement--The North American Industry Classification System Proposed Industry Classification Structure; Notice [[Page 26558]] OFFICE OF MANAGEMENT AND BUDGET Economic Classification Policy Committee: Standard Industrial Classification Replacement--The North American Industry Classification System Proposed Industry Classification Structure AGENCY: Office of Management and Budget, Executive Office of the President. ACTION: Notice of solicitation of comments for North American Industry Classification System industries. ----------------------------------------------------------------------- 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 majordomo@census.gov 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 naics@census.gov (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 ---------------------------------------------------------------------------------------------------------------- 4119@................................... Local Passenger Transportation, Ambulance Services (pt.). NEC. 4522@................................... Air Transportation, Nonscheduled Ambulance Services (pt.). 8011@................................... 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. 8031@................................... 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. 8051@................................... Skilled Nursing Care Facilities: Continuing Care Retirement Continuing Care Retirement Communities. Communities (pt.). All Other Skilled Nursing Care Nursing Care Facilities (pt.). Facilities. 8052@................................... 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. 8059@................................... 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. 8062@................................... General Medical and Surgical General Medical and Surgical Hospitals. Hospitals (pt.). 8063@................................... Psychiatric Hospitals........... Psychiatric and Substance Abuse Hospitals (pt.). 8069@................................... 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 ---------------------------------------------------------------------------------------------------------------- 7231@................................... 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.). 7911@................................... 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. 8249@................................... 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. 8299@................................... 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. 8748@................................... 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). 3578@................................... 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. 3579@................................... 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. 3652@................................... 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, 3699@................................... 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. 3842@................................... 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). 7372@................................... Prepackaged Software: Reproduction of Software...... Reproduction of Software. [[Page 26578]] Other......................... (Included in Information subsector). 7819@................................... Services Allied to Motion Picture Production Reproduction of Video......... Prerecorded Compact Disk, Tape and Record Manufacturing (pt). Other......................... (Included in Services subsector). ---------------------------------------------------------------------------------------------------------------- The abbreviation ``pt'' means ``part of'', @ means time series break has been created that is greater than 3% of the 1992 value of shipments for the 1987 SIC industry. The abbreviation NEC is used for Not Elsewhere Classified. Description of Changes to the U.S. System A number of the changes listed in this section were made for reasons of international comparability. Where one or more of the three North American countries had different definitions of an industry classification, adjustments to the definitions in one or more countries were required. In constructing NAICS, the three countries agreed to move, where change was required to attain international comparability, in the direction of the country or countries whose existing classification definitions most closely corresponded to the production- oriented concept adopted for NAICS. Cases where the U.S. changed are listed below; other cases where Canada Mexico moved toward the U.S. classification are not, of course, listed in this section. This is a new subsector for 1997. Computer and Electronic Product Manufacturing is composed of industries from 1987 Major Group 35, Industrial Commercial Machinery and Computer Equipment; 1987 Major Group 36, Electronic and Other Electrical Equipment and Components, Except Computer Equipment; and 1987 Major Group 38, Measuring, Analyzing and Controlling Instruments; Photographic, Medical and Optical Goods; Watches and Clocks. The following four complete industries were transferred into this subsector from 1987 Major Group 35, Industrial Commercial Machinery and Computer Equipment: SIC 3571, Electronic Computers SIC 3572, Computer Storage Devices SIC 3575, Computer Terminals SIC 3577, Computer Peripheral Equipment, NEC The following twelve complete industries were transferred into this subsector from 1987 Major Group 36, Electronic and Other Electrical Equipment and Components, Except Computer Equipment: SIC 3651, Household Audio and Video Equipment SIC 3661, Telephone and Telegraph Apparatus SIC 3663, Radio and Television Broadcasting and Communication Equipment SIC 3669, Communications Equipment, NEC SIC 3671, Electron Tubes SIC 3672, Printed Circuit Boards SIC 3674, Semiconductors and Related Devices SIC 3675, Electronic Capacitors SIC 3676, Electronic Resistors SIC 3677, Electronic Coils, Transformers, and Other Inductors SIC 3678, Electronic Connectors SIC 3695, Magnetic and Optical Recording Media Eight complete industries were transferred into this subsector from 1987 Major Group 38, Measuring, Analyzing and Controlling Instruments; Photographic, Medical and Optical Goods; Watches and Clocks. Those industries are: SIC 3812, Search, Detection, Navigation, Guidance, Aeronautical, and Nautical Systems and Instruments SIC 3822, Automatic Controls for Regulating Residential and Commercial Environments and Appliances SIC 3823, Industrial Instruments for Measurement, Display, and Control of Process Variables; and Related Products SIC 3824, Totalizing Fluid Meters and Counting Devices SIC 3826, Laboratory Analytical Instruments SIC 3844, X-Ray Apparatus and Tubes and Related Irradiation Apparatus SIC 3845, Electromedical and Electrotherapeutic Apparatus SIC 3873, Watches, Clocks, Clockwork Operated Devices, and Parts These 34 complete industries were transferred into this new subsector for one or more of the following reasons: (1) the changes were in response to public requests; (2) the changes were supported by similar processes; and (3) the changes produced international comparability. One industry, SIC 3825, Instruments for Measuring and Testing of Electricity and Electrical Signals, moved in its entirety to this subsector, but was split; portable instrument transformers to NAICS industry, Electronic Coil, Transformer, and other Inductor Manufacturing, and the rest going to NAICS industry, Instruments for Measuring and Testing of Electricity and Electrical Signal Manufacturing. Two new industries were formed from very similar activities that were formerly partly included in manufacturing and partly in services. Prerecorded Compact Disk, Except Software, Tape, and Record Manufacturing was formed from part of 1987 SIC 3652, Phonograph Records and Prerecorded Audio Tapes and Disks, and from part of 1987 SIC 7819, Services Allied to Motion Picture Production. Reproduction of Software was created from part of 1987 SIC 7372, Prepackaged Software. The ECPC recognizes that some establishments combine the production of prepackaged software and the production of other prerecorded compact disks, tapes, and records and that the production process is often the same. Therefore, it may be necessary to combine these activities into one industry. The ECPC requests specific comments on this proposal. (The publishing portions of these three 1987 SIC industries have been moved to the new NAICS Information sector.) These changes are made in response to an industry proposal, to improve international comparability, and to recognize that the production of prepackaged software is a manufacturing, not a services, activity. Eleven activities were transferred into 1997 Computer and Electronic Product Manufacturing. Point of sales terminals and fund transfer devices were transferred from 1987 SIC 3578, Calculating and Accounting Machines, Except Electronic Computers, into Other Computer Peripheral Equipment Manufacturing, in response to a proposal from the industry and to create a better production-oriented industry. Time clocks and other time recording devices were transferred from 1987 SIC 3579, Office Machines, NEC, into Watch, Clock and Part Manufacturing. [[Page 26579]] This improves international comparability and is supported by similarity in production processes. Phonograph records and prerecorded audio tapes and disks, except record publishing, were transferred from 1987 SIC 3652, Phonograph Records and Prerecorded Audio Tapes and Disks, into Prerecorded Compact Disk, Tape, and Record Manufacturing. This improves international comparability and is supported by similarity in production processes. Telephone and telegraph apparatus, except telephone transformers and consumer external PC modems, were transferred from 1987 SIC 3661, Telephone and Telegraph Apparatus, into Telephone Apparatus Manufacturing. This improves international comparability and is supported by similarity in production processes. The communication equipment formerly in 1987 SIC 3679, Electronic Components, NEC, was transferred into Broadcast and Studio Equipment Manufacturing for Radio, TV, and Cable. This improves international comparability and is supported by similarity in production processes. Other electronic components, including loaded printed circuit boards, were transferred from 1987 SIC 3679, Electronic Components, NEC, into Other Electronic Component Manufacturing. This improves international comparability and is supported by similarity in production processes. Other measuring and controlling devices, except medical thermometers, were transferred from 1987 SIC 3829, Measuring and Controlling Devices, NEC, into Other Measuring and Controlling Device Manufacturing. This improves international comparability and is supported by similarity in production processes. Bar code scanners were transferred from 1987 SIC 3699, Electrical Machinery, Equipment and Supplies, NEC, into Other Computer Peripheral Equipment Manufacturing. This improves international comparability and is supported by similarity in production processes. Reproduction of software was transferred from 1987 SIC 7372, Prepackaged Software, into Reproduction of Software. This improves international comparability and is supported by similarity in production processes. Reproduction of video was transferred from 1987 SIC 7819, Services Allied to Motion Picture Production, into Magnetic and Optical Media Manufacturing. This improves international comparability and is supported by similarity in production processes. Clock and watch springs were transferred from 1987 SIC 3495, Wire Springs, into Watch, Clock, and Part Manufacturing. This improves international comparability with Mexico, Canada, and the ISIC. There are 29 industries in this new subsector. For time series linkage 19 of the 29 1997 industries are comparable within three percent of the old 1987 industries. Part IV--Proposed New Industry Structure for Furniture Manufacturing Section A--NAICS Structure North American Industry Classification System (NAICS) Agreement Number 14 This Document represents the proposed agreement on the structure of the North American Industry Classification System (NAICS) for the following subsector: Furniture 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 Furniture Manufacturing XXX Furniture Manufacturing XXXX Mattress Manufacturing XXXX Blind and Shade Manufacturing XXXX Wood Furniture Manufacturing XXXX Metal Furniture Manufacturing XXXX Other Furniture Manufacturing Attachment 2--North American Industry Classification System Draft Classification for: Furniture 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 applies to the subsector, Furniture Manufacturing. This subsector contains one industry group and five industries. The subsector will be part of the Manufacturing sector of the classification. A General Outline Furniture Manufacturing includes establishments that produce articles such as chairs, beds, mattresses, dressers, tables and desks for human comfort, convenience and utility. Processes used in the manufacture of furniture include the cutting, bending, molding, laminating and assembly of such materials as wood, metal, glass, plastics, and rattan. In addition, design and fashion trends play an important part in the production of furniture. The production process for furniture is not solely bending metal, cutting and shaping wood, or extruding and molding plastic. The integrated design of the article for esthetic qualities, and to carry out its function efficiently, is also a major part of the process of manufacturing furniture, though design services are also sometimes purchased by furniture manufacturers from industrial designers. Furniture manufacturing establishments tend to specialize in making articles primarily from one material, such as wood or metal, because the production processes required to make a wooden table, for example, are quite different from the production processes for metal tables. However, it is unusual to make furniture exclusively from a single input. A wooden table might have metal brackets and a wooden chair a fabric or plastic seat. Some of the processes used in furniture manufacturing are similar to processes that are used in other segments of manufacturing. For example, cutting and assembly occurs in the production of wood trusses that are classified in the Wood Product Manufacturing, Except Furniture subsector. However, the multiple processes that distinguish wood furniture manufacturing from wood product manufacturing warrant inclusion of wooden furniture manufacturing in the Furniture Manufacturing subsector. Metal furniture manufacturing uses techniques that are also employed in the manufacturing of roll formed products in the Fabricated Metal Product Manufacturing sector. The molding [[Page 26580]] process for plastic furniture is similar to the molding of other plastic products. However, plastic furniture producing establishments tend to specialize in furniture. Though the production processes, products, and industry practices in furniture manufacturing are relatively mature ones, the existing classification structures in the three North American countries differed so extensively that substantial restructuring in all three countries was required in order to achieve international comparability. Even so, international comparability could be achieved only at a relatively high level of aggregation (for example, wood furniture manufacturing). Barriers to further expansion in NAICS detail are discussed in the following section, and additional information may be provided by countries in discussions of their own national industries. Limitations and Constraints of the Classification In the Furniture Manufacturing industries, most activities that were identified in one country exist in the others. However, often an activity is not economically significant to the same degree in all countries. For example, wood office furniture manufacturing in Canada is too small to publish, and wood store furniture manufacturing is too small to publish in both Canada and Mexico. It is not always possible to separately identify production process industries for end use categories. For example, United States manufacturers tend to specialize in household furniture or office furniture because differences in uses require differences in production. However, in Mexico household and office furniture are often produced in the same establishment, and some blurring of the household/ office distinction is apparent even in the U.S. For these reasons, only broad categories for wood and metal furniture and furniture made from other materials were created for NAICS. Each country will publish additional categories that comprise subdivisions of NAICS industries to present data for activities that are nationally significant. 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 Most 4-digit NAICS industries in this subsector are contained within Class 3610, Manufacture of Furniture, of the current International Standard Industrial Classification of all Economic Activities (ISIC, Revision 3) of the United Nations. A notable exception is the manufacture of blinds and shades that ISIC classifies into different ISIC divisions by type of input material. In North America, production of blinds and shades of multiple materials occurs in a single establishment, so it is neither possible nor desirable to separate them by type of material in the classification system. For this reason, both Mexico and the United States currently classify all blind and shade manufacturing in a single industry. Other differences between NAICS and ISIC include the classification of wood and metal partitions and serving carts, which are placed in the respective wood or metal products divisions of ISIC. In NAICS, these manufacturing activities are placed in Furniture Manufacturing since the manufacturing processes are essentially identical to those used for furniture. In spite of these differences, this NAICS subsector is substantially the same as ISIC Class 3610, because most of the production in this subsector occurs in the industries that are compatible with this ISIC class. Some Changes to the National Classifications For Canada, the NAICS Furniture Manufacturing subsector restructures the existing classification from an end use classification to a production process and input form, i.e., into wood, metal, and other furniture industries. In the case of wood furniture, the Canadian classification was structured both by input raw material (wood) and by end use, i.e., wooden household and upholstered household furniture. For furniture of metal and other materials, Canadian industries were restructured to the NAICS pattern. Other Canadian changes include the movement of wooden kitchen cabinets and bathroom vanities from the Wood Industries major group to this subsector, and the grouping of all kinds of shades, blinds and window hardware into a single NAICS industry. For Mexico, the significant change is one of concept. Formerly, Mexico had no separately identified furniture subsector. Thus, this subsector will be entirely new. Changes at the industry level are relatively small, as the current structure in Mexico classifies wood furniture in the wood product manufacturing industries, metal furniture in the fabricated metal manufacturing industries, etc. For the United States, changes parallel those in Canada. The existing U.S. structure classifies furniture by both inputs and end use in some detail. Like Canada, the U.S. structure has considerable detail for wood furniture, but unlike Canada, the U.S. also has substantial detail for metal furniture. A considerable amount of internal restructuring was required to achieve the NAICS design. However, the U.S. will retain substantial national industry detail below the level of the NAICS Furniture Manufacturing industries, e.g., wood household furniture is distinguished from wood office furniture at the 5-digit national detail level. Another important change for the United States is the inclusion of custom furniture in this sector. The manufacture of custom furniture was formerly classified in the retail sector. The change was made to agree with the Canadian and Mexican classification of the activity because the Canadian and Mexican treatment meets the production- oriented criterion for NAICS. Other changes include the movement of wood kitchen cabinets and wooden chair frames from the 1987 SIC Lumber and Wood Products, Except Furniture major group because the production processes are essentially identical to those for furniture. 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. In the main, the hierarchical structure of the classification also follows the production concept. 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. Other objectives of the NAICS project are not as relevant in this area of the classification as in others. These objectives are the delineation of new and emerging industries, service industries and industries engaged in the production of advanced technologies. The industrial sector in question is relatively mature, generally produces goods and has employed relatively stable technology. Therefore, the emphasis is on the objectives listed above. The industries have high specialization ratios, and they are economically significant. The detail (4- [[Page 26581]] digit) level and structures of the classification are balanced in size. This enhances the classification's suitability for sampling and other aspects of survey operations. Finally, though disruptions to time series exist, the major changes are well identified 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 NAICS industry subsector presented in Part IV, 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 IV 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................. Furniture Manufacturing: XXX................ Furniture Manufacturing: XXXX............... Mattress Manufacturing.... E 2515 Mattresses and Bedsprings. XXXX............... Blind and Shade E 2591 Drapery Hardware and Blinds and Manufacturing Shades. XXXX............... Wood Furniture Manufacturing: XXXXX.............. Wood Household Furniture R *2426 Hardwood Dimension and Flooring Manufacturing, Except Mills (wooden chair frames and Upholstered. chair seats). ................ *2499 Wood Products, NEC (wood laundry hampers). ................ 2511 Wood Household Furniture, Except Upholstered. ................ 2517 Wood TV and, Radio Cabinets. ................ *5712 Furniture Stores (custom made furniture except cabinets). XXXXX.............. Wood Kitchen Cabinet R 2434 Wood Kitchen Cabinets. Manufacturing ................ *5712 Furniture Stores (custom wood cabinets). XXXXX.............. Upholstered Wood E 2512 Wood Household Furniture, Household Furniture Upholstered. Manufacturing XXXXX.............. Wood Office and Public R *2426 Hardwood Dimension and Flooring Building Furniture Mills (office chair frames and Manufacturing. chair seats). ................ *2521 Wood Office Furniture. ................ *2531 Public Building and Related Furniture (wood furniture for public buildings). ................ *2599 Furniture and Fixtures, NEC (wood industrial work benches and stools, and other wood furniture such as ship furniture). ................ *3952 Lead Pencils, Crayons, and Artists' Materials (wood drafting tables and boards). XXXXX.............. Wood Office and Store R *2541 Wood Office and Store Fixtures, Fixture, Partition, Partitions, Shelving, and Shelving, and Locker Lockers (except custom Manufacturing. architectural woodwork, millwork, and fixtures). XXXXX.............. Custom Architectural N *2541 Wood Office and Store Fixtures, Woodwork, Millwork, and Partitions, Shelving, and Fixtures. Lockers (architectural woodwork, millwork, and fixtures). XXXX............... Metal Furniture Manufacturing: XXXXX.............. Metal Household Furniture R 2514 Metal Household Furniture. Manufacturing. ................ *3499 Fabricated Metal Products, NEC (metal household frames and furniture parts). XXXXX.............. Metal Office and Public R *2522 Office Furniture, Except Wood Building Furniture (metal office furniture). Manufacturing. ................ *2531 Public Building and Related Furniture (metal furniture for public buildings). ................ *2599 Furniture and Fixtures, NEC (metal industrial work benches and stools, and other metal furniture such as ship furniture). ................ *3499 Fabricated Metal Products, NEC (metal frames and furniture parts). ................ *3952 Lead Pencils, Crayons, and Artists' Materials (metal drafting tables and boards). ................ *3999 Manufacturing Industries, NEC (barber and beauty chairs). XXXXX.............. Metal Office and Store R *2542 Office and Store Fixtures, Fixture, Partition, Partitions, Shelving and Shelving and Locker Lockers, Except Wood (metal Manufacturing. office and store fixtures, partitions, shelving, and lockers). XXXX............... Other Furniture R *2499 Wood Products, NEC (laundry Manufacturing. hampers made from rattan, reed or willow) ................ 2519 Household Furniture, NEC. ................ *2522 Office Furniture, Except Wood (office furniture not made of wood or metal). ................ *2531 Public Building and Related Furniture (other furniture not made of wood or metal for public buildings). [[Page 26582]] ................ *2542 Office and Store Fixtures, Partitions, Shelving and Lockers, Except Wood (office and store fixtures, partitions, shelving, and lockers not made of metal). ................ *2599 Furniture and Fixtures, NEC (other furniture or fixtures). ---------------------------------------------------------------------------------------------------------------- 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 ---------------------------------------------------------------------------------------------------------------- 2426.................................... Hardwood Dimension and Flooring Mills: Hardwood Flooring............. Millwork Manufacturing, Including Flooring (pt) (Included in the Wood Product Manufacturing, Except Furniture subsector). Stock and Turnings........... Other Wood Product Manufacturing (pt) (Included in the Wood Product Manufacturing, Except Furniture subsector). Office Chair Frames and Chair Wood Office and Public Building Seats. Furniture Manufacturing (pt). Chair Frames for Wood Household Furniture Nonupholstered Furniture Manufacturing, Except Upholstered (Household). (pt). Chair Frames for Upholstered Upholstered Wood Household Furniture Furniture (Household). Manufacturing (pt). Hardwood Dimension Except Hardwood Dimension Mills (Included Flooring. in the Wood Product Manufacturing, Except Furniture subsector). 2434.................................... Wood Kitchen Cabinets........... Wood Kitchen Cabinet Manufacturing (pt). 2499.................................... Wood Products, NEC: Wood Tubs and Vats, Jewelry Other Wood Container Manufacturing and Cigar Boxes. (pt) (Included in the Wood Product Manufacturing, Except Furniture subsector). Wood Laundry Hampers.......... Wood Household Furniture Manufacturing, Except Upholstered (pt). Laundry Hampers Made from Other Furniture Manufacturing (pt). Rattan, Reed or Willow. 2511@................................... Wood Household Furniture, Except Wood Household Furniture Upholstered. Manufacturing, Except Upholstered (pt). 2512.................................... Wood Household Furniture, Upholstered Wood Household Furniture Upholstered. Manufacturing. 2514.................................... Metal Household Furniture....... Metal Household Furniture Manufacturing (pt). 2515.................................... Mattresses and Bedsprings....... Mattress Manufacturing. 2517@................................... Wood TV and, Radio Cabinets..... Wood Household Furniture Manufacturing, Except Upholstered (pt). 2519@................................... Household Furniture, NEC........ Other Furniture Manufacturing (pt). 2521.................................... Wood Office Furniture........... Wood Office and Public Building Furniture Manufacturing (pt). 2522@................................... Office Furniture, Except Wood:.. Metal Office Furniture........ Metal Office Furniture Manufacturing (pt). Office Furniture Not Made of Other Furniture Manufacturing (pt). Wood or Metal. 2531@................................... Public Building and Related Furniture: Blackboards................... All Other Miscellaneous Manufacturing (pt) (To Be Included in Miscellaneous Manufacturing subsector). Seats for Motor Vehicles...... Motor Vehicle Fabric Accessory and Seat Manufacturing (pt) (Included in Transportation Equipment Manufacturing subsector). Metal Furniture for Public Metal Office and Public Building Building. Furniture Manufacturing (pt). Wood Furniture for Public Wood Office and Public Building Building. Furniture Manufacturing (pt). Other Furniture Not Made of Other Furniture Manufacturing (pt). Wood or Metal for Public Buildings. 2541@................................... Wood Office and Store Fixtures, Partitions, Shelving, and Lockers: Except Architectural Woodwork, Wood Office and Store Fixture, Millwork and Fixtures. Partition, Shelving and Locker Manufacturing (pt.). Custom Architectural Woodwork, Custom Architectural Woodwork, Millwork and Fixtures. Millwork, and Fixtures. 2542@................................... Partitions and Fixtures, Except Wood: Metal Office and Store Metal Office and Store Fixture, Fixtures, Partitions, Partition, Shelving and Locker Shelving, and Lockers. Manufacturing (pt). Office and Store Fixtures, Other Furniture Manufacturing (pt). Partitions, Shelving, and Lockers Not Made of Metal. 2591.................................... Drapery Hardware and Blinds and Blind and Shade Manufacturing. Shades. 2599@................................... Furniture and Fixtures, NEC: Hospital Beds................. Orthopedic, Prosthetic and Surgical Appliance and Supply Manufacturing (pt) (To Be Included in Miscellaneous Manufacturing subsector). [[Page 26583]] Metal Industrial Work Benches Metal Office and Public Building and Stools, and Other Metal Furniture Manufacturing (pt). Furniture Such As Ship Furniture. Wood Industrial Work Benches Wood Office and Public Building and Stools, and Other Wood Furniture Manufacturing (pt). Furniture Such As Ship Furniture. Other Furniture and Fixtures.. Other Furniture Manufacturing (pt). 3499.................................... Fabricated Metal Products, NEC: Metal Frames and Furniture Metal Household Furniture Parts, Household. Manufacturing (pt). Metal Frames and Furniture Metal Office and Public Building Parts, Office. Furniture Manufacturing (pt). Powder Metallurgy............ Metal Stamping and Powder Metallurgy Manufacturing (pt) (Included in Fabricated Metal Product Manufacturing subsector). Metal Boxes................... Metal Shipping Container, Barrel, Drum, Keg, Pail, Bin, Box, etc. Manufacturing (pt) (Included in Fabricated Metal Product Manufacturing subsector). Safe and Vault Locks Hardware Manufacturing, Including Locks (pt) (Included in Fabricated Metal Product Manufacturing subsector).. Metal Aerosol Valves.......... Other Valve and Pipe Fitting Manufacturing (pt) (Included in Fabricated Metal Product Manufacturing subsector). Other Metal Products.......... All Other Miscellaneous Fabricated Metal Product Manufacturing (pt) (Included in Fabricated Metal Product Manufacturing subsector). 3952@................................... Lead Pencils, Crayons, and Artist's Materials: Metal Drafting Tables and Metal Office and Public Building Boards. Furniture Manufacturing (pt). Wood Drafting Tables and Wood Office and Public Building Boards. Furniture Manufacturing (pt). Drawing and India Ink......... Printing Ink Manufacturing (pt) (Included in Chemical Manufacturing subsector). Other......................... Lead Pencil and Art Goods Manufacturing (pt) (To be included in Miscellaneous Manufacturing subsector). 3999.................................... Manufacturing Industries, NEC:.. Beauty and Barber Chairs...... Metal Office and Public Building Furniture Manufacturing (pt). Burnt Wood Articles........... Other Wood Product Manufacturing (pt) (Included in Wood Product Manufacturing, Except Furniture subsector). Fur Bleaching, Currying, Leather and Hide Tanning and Scraping, Tanning and Dyeing. Finishing Manufacturing (pt) (Included in Leather and Allied Product Manufacturing subsector) Lamp Shades of Paper and Other Lighting Equipment Textile. Manufacturing (pt) (Included in Electrical Equipment, Appliance and Component Manufacturing subsector). Matches....................... Other Miscellaneous Chemical Product Manufacturing (pt) (Included in Chemical Manufacturing subsector). Metal Products, Such As Combs, All Other Fabricated Metal Product Hair Curlers, Etc.. Manufacturing (pt) (Included in Fabricated Metal Product Manufacturing subsector). Plastics Products, Such As All Other Plastic Product Combs, Hair Curlers, Etc.. Manufacturing (pt) (Included in Rubber and Plastic Product Manufacturing subsector). Flexographic Printing Eyeglass Commercial Flexographic Printing Frames for the Trade. (pt) (Included in Printing and Related Support Activities subsector). Gravure Printing Eyeglass Commercial Gravure Printing (pt) Frames for the Trade. (Included in Printing and Related Support Activities subsector). Lithographic Printing Eyeglass Commercial Lithographic Printing Frames for the Trade. (pt) (Included in Printing and Related Support Activities subsector). Screen Printing Eyeglass Commercial Screen Printing (pt) Frames for the Trade. (Included in Printing and Related Support Activities subsector). Other Printing Eyeglass Frames Other Commercial Printing (pt) ( for the Trade. Included in Printing and Related Support Activities subsector). Tape Measures................. Hand and Edge Tool Manufacturing (pt) (Included in Fabricated Metal Product Manufacturing subsector). Other......................... All Other Miscellaneous Manufacturing (pt) (To Be Included in Miscellaneous Manufacturing subsector). 5712.................................... Furniture Stores: Custom Made Furniture, Except Wood Household Furniture Cabinets. Manufacturing, Except Upholstered (pt). Custom Wood Cabinets.......... Wood Kitchen Cabinet Manufacturing (pt). Other Than Custom Made To Be Included in the Retail sector. Furniture. ---------------------------------------------------------------------------------------------------------------- The abbreviation ``pt'' means ``part of'', @ means time series break has been created that is greater than 3% of the 1992 value of shipments for the 1987 SIC industry. The abbreviation NEC is used for Not Elsewhere Classified. [[Page 26584]] Description of Changes to the U.S. System A number of the changes listed in this section were made for reasons of international comparability. Where one or more of the three North American countries had different definitions of an industry classification, adjustments to the definitions in one or more countries were required. In constructing NAICS, the three countries agreed to move, where change was required to attain international comparability, in the direction of the country or countries whose existing classification definitions most closely corresponded to the production- oriented concept adopted for NAICS. Cases where the U.S. changed are listed below; other cases where Canada or Mexico moved toward the U.S. classification are not, of course, listed in this section. Three activities were transferred out of 1987 SIC Furniture major group. Motor vehicle seats were transferred from part of 1987 SIC 2531, Public Building and Related Furniture, into Motor Vehicle Fabric Accessory and Seat Manufacturing in the 1997 NAICS subsector for Transportation Equipment Manufacturing. This change was made for international comparability and because there is very little production similarity between the manufacture of automobile seats and the production of church pews and like products that are in 1987 SIC 2531. Hospital beds were transferred from part of 1987 SIC 2599, Furniture and Fixtures, NEC, into Orthopedic, Prosthetic, and Surgical Appliance and Supply Manufacturing in the 1997 NAICS subsector for Miscellaneous Manufacturing. This change was necessary to align the U.S. classification to that of Canada and Mexico. Blackboards were transferred from part of 1987 SIC 2531, Public Building and Related Furniture, into All Other Miscellaneous Manufacturing in the 1997 NAICS subsector for Miscellaneous Manufacturing. This change was necessary to align the U.S. classification system with that of Mexico. Eight activities were transferred into the 1997 NAICS Furniture Manufacturing subsector. Three of the eight were transformed from 1987 SIC NEC industries. Wooden chair frames and seats were transferred from part of 1987 SIC 2426, Hardwood Dimension and Flooring Mills, and classified in this subsector. This change was necessary to align the U.S. classification with that of Mexico and Canada, and because the production processes are similar. Wood laundry hampers were transferred from part of 1987 SIC 2499, Wood Products, NEC, and placed by component material in their respective NAICS industries. This change was necessary to align the U.S. classification with that of Canada. Custom wood household furniture was transferred from part of 1987 Retail Industry SIC 5712, Furniture Stores, into Wood Household Furniture. This change was necessary to align the U.S. classification with that of Mexico and Canada, and because the production process is essentially that of furniture manufacturing and the retailing activity is subsidiary. Wood kitchen cabinets were transferred from 1987 SIC Major Group 24, Lumber and Wood Products, Except Furniture. This change reflects production processes that are essentially identical with those for furniture. The change also facilitated and increased the international comparability with Canada and Mexico. Custom wood kitchen cabinets were transferred from part of 1987 Retail SIC 5712, Furniture Stores, into Wood Kitchen Cabinet Manufacturing, for international comparability, as noted above. Drafting tables and boards were transferred from 1987 SIC 3952, Lead Pencils, Crayons, and Artists' Materials, and classified in the Furniture Manufacturing subsector. This change was necessary to align the U.S. classification with that of Canada and Mexico, and because the production process is similar to other furniture manufacturing. Metal frames and furniture parts were transferred from 1987 SIC 3499, Fabricated Metal Products, NEC, and classified in the Furniture Manufacturing subsector. This change was necessary to align the U.S. classification with that of Canada. Barber and beauty chairs were transferred from 1987 SIC 3999, Manufacturing Industries, NEC, into Metal Office Furniture Manufacturing. This change was necessary to reflect the common production processes and similarities between beauty and barber shop chair manufacturers and other furniture manufacturers. A new industry was created for Custom Architectural Woodwork, Millwork, and Fixtures from part of SIC 2541, Wood Office and Store Fixtures, Partitions, Shelving and Lockers. Also several activities were transferred within the Furniture Manufacturing subsector. In addition, 1987 SIC 2517, Wood TV and Radio Cabinets, was combined with Wood Household Furniture Manufacturing because production in 1987 SIC 2517 has declined in the U.S. and the production processes are similar in both industries. The number of Furniture Manufacturing industries declined from 13 in 1987 to 12 in 1997. For time series linkage, seven of the 13 1987 industries are comparable within three percent of the 1997 industries. Part V--Proposed New Industry Structure for Printing and Related Support Activities. Section A--NAICS Structure North American Industry Classification System (NAICS) Agreement Number 15 This Document represents the proposed agreement on the structure of the North American Industry Classification System (NAICS) for the following subsector: Printing and Related Support Activities 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 Printing and Related Support Activities XXX Printing and Related Support Activities XXXX Printing XXXX Support Activities for Printing Attachment 2--North American Industry Classification System Draft Classification for: Printing and Related Support Activities Representatives of the statistical agencies of Canada, Mexico, and the [[Page 26585]] United States agree to a draft industrial classification for these industries. The draft classification applies to the subsector, Printing and Related Support Activities. The subsector is subdivided into a single industry group and two industries. The subsector will be part of the Manufacturing sector of the classification. A General Outline Printing and Related Support Activities industries print products such as newspapers, books, periodicals, business forms, greeting cards, and other material. Support activities, such as bookbinding, plate making, and data imaging are also included in this subsector. These activities are an integral part of the printing industry, and a product (a printing plate, a bound book, or a computer disk or file) that is an integral part of the printing industry is almost always provided by these operations. Processes used in printing include a variety of methods used to transfer an image from a plate, screen, or computer file to some medium, such as paper, plastic, metal, textile articles or wood. The most prominent of these methods is to transfer the image from a plate or screen to the medium (lithographic, gravure, screen and flexographic printing). A rapidly growing new technology uses a computer file to ``drive'' the printing mechanism directly to create the image (non- impact printing). A number of important boundary issues involving printing and other sectors are noted in the Some Changes to National Classifications section. In contrast to many other classification systems that locate publishing of printed materials in manufacturing, NAICS locates the publishing of printed products in a separate subsector, Publishing, which is part of the new NAICS Information sector, to be published separately. Though printing and publishing are often carried out by the same enterprise (a newspaper, for example), it is less and less the case that these distinct activities are carried out in the same establishment. More information on this change is contained in the text to the proposed NAICS Information sector. Limitations and Constraints of the Classification Most of the printing activities that take place in one country exist in the others. It is not possible in all countries to identify separately production process industries or specialized end use production categories. For example, in Canada and the United States, unique production establishments exist for the printing of books and business forms, and these processes can be recognized in the U.S. classification. In Mexico, however, book or business forms printers also print other types of products. Similarly, printing in Canada and the United States occurs largely in establishments that use a single printing process, such as lithographic or screen printing; in Mexico, diverse types of printing equipment are used in the same establishment. For these reasons, only broad categories for printing (of all types) and support activities for printing were created for NAICS. Each country will publish additional categories that comprise subdivisions of NAICS industries, to present data for activities that are nationally significant. 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 Both 4-digit industries in this subsector are contained within Division 22, Publishing Printing, and Reproduction of Recorded Media, of the current Standard Industrial Classification of all Economic Activities (ISIC, Revision 3) of the United Nations. However, two activities that are included in the NAICS Printing and Related Support Activities subsector are classified elsewhere in ISIC. Printing on textile articles is included in ISIC 1729, Manufacture of Other Textiles, NEC. Lithographic and gravure commercial printing of labels and tags is included in ISIC 2109, Manufacture of Other Articles of Paper and Paperboard. Some Changes to the National Classifications For all three countries, publishing, including integrated publishing and printing establishments, has been moved out of the Printing and Related Support Activities subsector into the new NAICS Information sector. For Canada, a major change to the Printing and Related Support Activities subsector is to move printing on purchased fabric articles (mostly ``T'' shirts) from the Clothing Industries major group to this subsector. The production process involved here is printing, and not the manufacture of clothing. Another change is the redefinition of certain types of printing, sometimes referred to as ``quick printing.'' This printing is done in relatively small, often ``store front'' establishments; these establishments use small printers, and usually bundle printing with other services, such as mailing, fax and similar types of activities. Because printing is only one of a number of services performed in the same establishment, ``quick printers'' have been located in the NAICS Management, Employment, Administrative and Support Services subsector. This redefinition must be carefully constructed to ensure that commercial printing is not misclassified in the Management, Employment, Administrative and Support Services subsector. For Mexico, changes to this subsector are minor. For the United States, changes parallel those made for Canada. Printing on purchased fabric articles and the redefinition of quick printing were made for the United States, as they were in Canada. Printing on signs and advertising specialties was also moved here from its current U.S. classification in Miscellaneous Manufacturing in order to attain comparability with Canada and Mexico, and because the production process is primarily printing. A similar change, made for the identical reasons, involves printing on tags and labels. 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. In the main, the hierarchical structure of the classification also follows the production concept. Other objectives of the NAICS project are not as relevant in this area of the classification as in others. These objectives are the delineation of new and emerging industries, service industries and industries engaged in the production of advanced technologies. The industrial sector in question is relatively mature, generally produces goods and has employed relatively stable technology. An evolving new technology in the printing industry involves the creation of a computer file that directly drives printing equipment. Thus, no printing plate is needed. This technology, however, does not yet account for a significant share of production in any of the three countries, and therefore has not been separated in the classification. The industries have high specialization ratios, and they are economically significant. While disruptions to time series exist, they [[Page 26586]] have been minimized. 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 V, 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 V 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................. Printing and Related Support Activities: XXX................ Printing and Related Support Activities: XXXX............... Printing: XXXXX.............. Book Printing............ E 2732 Book Printing. XXXXX.............. Commercial Lithographic R *2752 Commercial Printing, Lithographic Printing. (Except Quick Printing). ................ *2771 Greeting Cards (lithographic printing of greeting cards). ................ *2782 Blankbooks, Loose-leaf Binders and Devices (lithographic printing of checkbooks). ................ *3993 Signs and Advertising Specialties (lithographic printing of advertising specialties). ................ *3999 Manufacturing Industries, NEC (lithographic printing of eyeglass frames for the trade). XXXXX.............. Commercial Gravure R 2754 Commercial Printing, Gravure. Printing. ................ *2771 Greeting Cards (gravure printing of greeting cards). ................ *2782 Blankbooks, Loose-leaf Binders and Devices (gravure printing of checkbooks). ................ *3993 Signs and Advertising Specialties (gravure printing of advertising specialties). ................ *3999 Manufacturing Industries, NEC (gravure printing of eyeglass frames for the trade). XXXXX.............. Commercial Screen N *2759 Commercial Printing, NEC (screen Printing. printing). ................ *2771 Greeting Cards (screen printing of greeting cards). ................ *2782 Blankbooks, Loose-leaf Binders and Devices (screen printing of checkbooks). ................ *3993 Signs and Advertising Specialties (screen printing of advertising specialties). ................ *3999 Manufacturing Industries, NEC (screen printing of eyeglass frames for the trade). XXXXX.............. Commercial Flexographic N *2759 Commercial Printing, NEC Printing. (flexographic printing). ................ *2771 Greeting Cards (flexographic printing of greeting cards). ................ *2782 Blankbooks, Loose-leaf Binders and Devices (flexographic printing of checkbooks). ................ *3993 Signs and Advertising Specialties (flexographic printing of advertising specialties). ................ *3999 Manufacturing Industries, NEC (flexographic printing of eyeglass frames for the trade). XXXXX.............. Other Commercial Printing R *2759 Commercial Printing, NEC (other commercial printing). ................ *2771 Greeting Cards (other printing of greeting cards). ................ *2782 Blankbooks, Loose-leaf Binders and Devices (other printing of checkbooks). ................ *3993 Signs and Advertising Specialties (other printing of advertising specialties for the trade). ................ *3999 Manufacturing Industries, NEC (other printing of eyeglass frames for the trade). XXXXX.............. Manifold Business Form E 2761 Manifold Business Forms. Printing. XXXXX.............. Bankbook, Loose-leaf R *2782 Blankbooks, Loose-leaf Binders Binder and Device. and Devices (except checkbooks). Manufacturing: XXXXX.............. Printing on Apparel..... N *2396 Automotive Trimmings, Apparel Findings, and Related Products (Printing and Embossing on Fabric Articles). XXXX............... Support Activities for Printing: XXXXX.............. Tradebinding and Related E 2789 Bookbinding and Related Work. Work. XXXXX.............. Prepress Services....... R 2791 Typesetting. [[Page 26587]] ................ 2796 Platemaking and Related Services. ---------------------------------------------------------------------------------------------------------------- The definitions of status codes are as follows: E--existing industry; L--null industry for the U.S.; 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 ---------------------------------------------------------------------------------------------------------------- 2711.................................... Newspapers: Publishing, or Included in new Information sector. Publishing and Printing. 2721.................................... Periodicals: Publishing, or Included in new Information sector. Publishing and Printing. 2731.................................... Books: Publishing, or Publishing Included in new Information sector. and Printing. 2732.................................... Book Printing................... Book Printing. 2741.................................... Miscellaneous Publishing........ Included in new Information sector. 2752.................................... Commercial Printing, Commercial Lithographic Printing Lithographic. (pt.). Commercial Printing, Lithographic (Except Quick Printing): Quick Printing................ Included in Other Services sector. 2754.................................... Commercial Printing, Gravure.... Commercial Gravure Printing (pt). 2759@................................... Commercial Printing, NEC: Flexographic Printing......... Commercial Screen Printing (pt). Other Commercial Printing (pt).. 2761.................................... Manifold Business Forms......... Manifold Business Form Printing (pt). 2771@................................... Greeting Cards: Lithographic Printing of Commercial Lithographic Printing Greeting Cards. (pt). Gravure Printing of Greeting Commercial Gravure Printing (pt). Cards. Flexographic Printing of Commercial Flexographic Printing Greeting Cards. (pt). Screen Printing of Greeting Commercial Screen Printing (pt). Cards. Other Printing of Greeting Other Commercial Printing (pt). Cards. Publishing Greeting Cards..... Included in new Information Sector. 2782@................................... Blankbooks, Loose-leaf Binders and Devices: Lithographic Printing of Commercial Lithographic Printing Checkbooks. (pt). Gravure Printing of Checkbooks Commercial Gravure Printing (pt). Flexographic Printing of Commercial Flexographic Printing Checkbooks. (pt). Screen Printing of Checkbooks. Commercial Screen Printing (pt). Other Printing of Checkbooks.. Other Commercial Printing (pt). Blankbooks, Loose-leaf Binders Blankbook, Loose-leaf Binder and and Devices. Device Manufacturing. 2789.................................... Bookbinding and Related Work.... Tradebinding and Related Work. 2791@................................... Typesetting..................... Prepress Services (pt). 2796@................................... Platemaking and Related Services Prepress Services (pt). 3993@................................... Signs and Advertising Specialties: Lithographic Printing of Commercial Lithographic Printing Advertising Specialties. (pt). Gravure Printing of Commercial Gravure Printing (pt). Advertising Specialties. Flexographic Printing of Commercial Flexographic Printing Advertising Specialties. (pt). Screen Printing of Advertising Commercial Screen Printing (pt). Specialties. Other Printing of Advertising Other Commercial Printing (pt). Specialties. Electric Signs................ Electric Signs (Included in Electrical Equipment, Appliance, and Component Manufacturing subsector). Non-Electric Wood Signs....... Other Wood Product Manufacturing (pt) (Included in Wood Product Manufacturing, Except Furniture subsector). Non-Electric Metal Signs...... All Other Fabricated Metal Product Manufacturing (pt) (Included in Fabricated Metal Product Manufacturing subsector). Non-Electric Plastics Signs... All Other Plastic Product Manufacturing (pt) (Included in Rubber and Plastic Product Manufacturing subsector). 3999@................................... Manufacturing Industries, NEC: Lithographic Printing of Commercial Lithographic Printing Eyeglass Frames for the Trade. (pt). Gravure Printing of Eyeglass Commercial Gravure Printing (pt). Frames for the Trade. Flexographic Printing of Commercial Flexographic Printing Eyeglass Frames for the Trade. (pt). Screen Printing of Eyeglass Commercial Screen Printing (pt). Frames for the Trade. Other Printing of Eyeglass Other Commercial Printing (pt). Frames for the Trade. Other......................... Other Miscellaneous Manufacturing (pt) (To Be Included in Miscellaneous Manufacturing subsector). 2396@................................... Automotive Trimmings, Apparel Findings, and Related Products: [[Page 26588]] Printing and Embossing on Printing on Apparel. Fabric Articles. Automotive Trimmings.......... Motor Vehicle Fabric Accessory and Seat Manufacturing (pt) (Included in Transportation Equipment Manufacturing subsector). Apparel Findings and Trimmings Apparel Belts, Apparel Accessories, and Other Apparel Manufacturing (pt) (Included in Apparel Manufacturing subsector). Other Apparel Trimmings....... All Other Miscellaneous Textile Product Mills (pt) (Included in Textile Product Mills subsector). ---------------------------------------------------------------------------------------------------------------- The abbreviation ``pt'' means ``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 Three new industries were added to the 1997 industry structure for this industry subsector. Commercial Screen Printing was created from part of 1987 SIC 2759, Commercial Printing, NEC; part of 1987 SIC 2771, Greeting Cards; part of 1987 SIC 2782, Blankbooks, Loose-leaf Binders, and Devices; part of 1987 SIC 3993, Signs and Advertising Specialties; and part of 1987 SIC 3999, Manufacturing Industries, NEC. This change was made in response to a proposal from the industry and it corresponds to the production- oriented industry concept accepted for NAICS. Commercial Flexographic Printing was created from part of 1987 SIC 2759, Commercial Printing, NEC; part of 1987 SIC 2771, Greeting Cards; part of 1987 SIC 2782, Blankbooks, Loose-leaf Binders, and Devices; and part of 1987 SIC 3993, Manufacturing Industries, NEC, and part of 1987 SIC 3999, Manufacturing Industries, NEC. This change corresponds to the production-oriented industry concept accepted for NAICS. Printing on Apparel was created from part of 1987 SIC 2396, Automotive Trimmings, Apparel Findings, and Related Products. This change was made for international comparability, and because the process involved is printing, not apparel manufacture. Four industries were removed from this industry group and transferred to the new NAICS Information sector. They are: 1987 SIC 2711, Newspapers: Publishing, or Publishing and Printing. 1987 SIC 2721, Periodicals: Publishing, or Publishing and Printing. 1987 SIC 2731, Books: Publishing, or Publishing and Printing. 1987 SIC 2741, Miscellaneous Publishing. These four industries were transferred to the newly created Information sector in response to the increased use of electronic and other means for information transformation, manipulation, and dissemination, and because the production processes that characterize publishing are neither printing nor manufacturing. Where printing of newspapers, periodicals and books take place in a separate establishment (increasingly the case), these printing activities remain in manufacturing. More information is contained in the text for the NAICS Information sector, published separately. Two activities were transferred into the 1997 NAICS Printing and Related Support Activities subsector. Advertising specialty manufacturing transferred from part of 1987 SIC 3993, Signs and Advertising Displays, into Commercial Printing, depending on the printing process. Printing eyeglasses for the trade transferred from part of 1987 SIC 3999, Manufacturing Industries, NEC, into Commercial Printing, depending on the printing process. Transferring these two activities into the Printing and Related Support Activities subsector was necessary to align the U.S. classification with those of Canada and Mexico, and because the activities are printing processes. One activity was transferred out of the 1977 NAICS subsector for Printing and Allied Industries. Quick printing, 1987 industry code 2752 was transferred to the Other Services subsectors. This change was made to better conform with production services. Also, several activities were transferred within the Printing and Related Support Activities subsector. The number of printing industries decreased from 14 in 1987 to 11 in 1997. For time series linkage, 5 of the 14 1987 industries are comparable within three percent of the 1997 industries. Part VI--Proposed New Industry Structure for Professional, Scientific and Technical Services Section A--NAICS Structure North American Industry Classification System (NAICS) Agreement Number 16 This Document represents the proposed agreement on the structure of the North American Industry Classification System (NAICS) for the following industries: Professional, Scientific and Technical 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 XX Professional, Scientific and Technical Services XXX Legal Services XXXX Offices of Lawyers XXXX Offices of Notaries XXXX Other Legal Services XXX Accounting, Tax Preparation, Bookkeeping and Payroll Services XXXX Offices of Accountants [[Page 26589]] XXXX Tax Preparation, Bookkeeping and Payroll Services XXX Architectural, Engineering and Related Services XXXX Architectural Services XXXX Engineering Services XXXX Drafting Services XXXX Building Inspection Services XXXX Landscape Architecture Services XXXX Surveying and Mapping Services XXXX Geophysical Surveying Services XXXX Testing Laboratories XXX Specialized Design Services XXXX Interior Design Services XXXX Industrial Design Services XXXX Graphic Design Services XXXX Other Specialized Design Services XXX Computer Systems Design and Related Services XXXX Computer Systems Design and Related Services XXX Management, Scientific and Technical Consulting Services XXXX Management Consulting Services XXXX Environmental Consulting Services XXXX Other Scientific and Technical Consulting Services XXX Scientific Research and Development Services XXXX Research and Development in the Physical and Engineering Sciences XXXX Research and Development in the Life Sciences XXXX Research and Development in the Social Sciences and Humanities XXX Advertising and Related Services XXXX Advertising Agencies XXXX Public Relations Services XXXX Media Buying Agencies XXXX Media Representatives XXXX Display Advertising XXXX Direct Mail Advertising XXXX Advertising Material Distribution XXXX Other Services Related to Advertising XXX Other Professional, Scientific and Technical Services XXXX Market Research and Public Opinion Polling XXXX Photography Services XXXX Translation and Interpretation Services XXXX Veterinary Services XXXX All Other Professional, Scientific and Technical Services Attachment 2--North American Industry Classification System Draft Classification for: Professional, Scientific, and Technical Services Representatives of the statistical agencies of Canada, Mexico, and the United States agree to a draft industry classification for the Professional, Scientific, and Technical Service industries. The subsector is further subdivided into nine industry groups and 37 industries. The placement of this subsector within the NAICS structure is not yet determined. A General Outline The statistical agencies of Canada, Mexico, and the United States have agreed to place major emphasis on improved services classifications in NAICS. In their July 26, 1994 statement of concept for NAICS (FR, Vol. 59, No. 142, p. 38094), they stated: ``Statistical agencies of the three countries agree to give special attention to developing production-oriented classifications for (a) new and emerging industries, (b) service industries in general * * *.'' Past industry classifications have two analytical inadequacies. First, individual services industries are too few in number, which is another way of saying that they have been defined too broadly to be useful--they have combined too many disparate activities into a single industry definition. This criticism has been heard even in the U.S., which had more services industry detail in its 1987 Standard Industrial Classification Manual than was the case for most other classification systems. As indicated later in this outline, the detail problem has been addressed in NAICS by breaking out new services industries from many of the broad and heterogeneous industries in the former systems of all three countries. A second problem in past services industry classifications is a general lack of a coherent structure. To take the 1987 U.S. SIC system as an example, though it had what in NAICS would be called a ``subsector'' for ``Business Services,'' it was difficult to discern an organizational principle in this subsector, or the relation that the industries included in it had to each other or to the subsector as a whole. Moreover, engineering and architecture were not defined as business services at all, and were located in a different part of the classification. Again, this lack of coherent structure has been criticized. In NAICS, organizing principles have been sought that will give coherence to NAICS services sectors and subsectors. The organizing principle of the Professional, Scientific, and Technical Services subsector is human capital, the knowledge and skills of the employees in the subsector. A services firm is often in the business of selling the skills of its workers. When this is the case, the production process of a services producer depends essentially on the abilities and capabilities of its employees. Of course, human capital is important in other areas of services as well--medicine, for example. A broad interpretation of the principles of human capital could have led to the inclusion of other industries in this subsector. For example, investment advisors and real estate appraisers also make available the particular knowledge and skills of their human capital. The distinguishing feature of the Professional, Scientific, and Technical Services subsector is the fact that most of the industries grouped in it have production processes that are almost wholly dependent on worker skills. In most of these industries, equipment and materials are not of major importance, unlike health care, for example, where ``high tech'' machines and materials are important collaborating inputs to labor skills in the production of health care. Thus, the establishments classified in this subsector are expertise sellers. Much of the expertise requires degrees, though not in every case. Moreover, differences in expertise and in training distinguish the industries that are classified in this subsector. Because of the importance of services industries, and their rapid growth in North America, the three countries' statistical agencies have created a forward looking classification for this subsector that is intended to provide a framework for measuring services as they expand throughout the entire North American economy. For this reason, many NAICS industries in this subsector have been created even when they cannot at present be supported by all three countries. This is a different rule than the one followed in most of the traditional goods producing sectors. The following paragraphs provide a brief description of the content of each industry group and observations on issues that are of particular interest. The Legal Services industry group includes Offices of Lawyers, Offices of Notaries and Other Legal Services. Offices of Lawyers are by far the largest industry in this group. Though many law firms specialize in particular forms of law practice, no acceptable way was found to further disaggregate this industry into more detailed industries that would be collectible in all three countries, and would apply to the operations of the industry in all three countries. In Canada and Mexico, Offices of Notaries are empowered to draft, approve, and execute legal documents and contracts. Such establishments do not exist in the United States. The Other Legal Services industry actually groups legal activities that are noncomparable in the three countries. In Canada, this industry includes offices of bailiffs that are involved in a mixture of activities, including enforcing court orders, serving writs and summonses, repossession of property and providing court house security. Bailiffs in Mexico [[Page 26590]] and the United States are employees of the courts and normally provide security, and serve court documents. For this reason, offices of bailiffs do not exist as establishments in the U.S. and Mexico. The Other Legal Services industry includes offices of paralegals in the United States. Though most paralegals in the U.S. are employees of other legal firms, separate establishments of paralegals are emerging, and are placed in the Other Legal Services industry. The Other Legal Services industry does not exist in Mexico, because neither bailiffs nor paralegals exist as independent establishments. The Accounting, Tax Preparation, Bookkeeping and Payroll Services industry group includes establishments providing auditing, accounting, tax preparation, bookkeeping and billing, and payroll accounting services. The dominant expertise in this industry group is expertise in accounting. However, other activities that are sometimes done in accounting firms and sometimes in more specialized establishments (tax preparation, for example) are also located here. The United States will subdivide the Offices of Accountants industry to distinguish auditing accountants (Certified Public Accountants (CPAs)) from non-auditing accountants (non-CPAs). The Architectural, Engineering and Related Services industry group includes establishments providing architectural, engineering, drafting, building inspection and surveying services. All of the proposed industries within this industry group are specialized and economically significant in Canada and the United States. However, three industries (Drafting Services, Surveying and Mapping Services and Geophysical Surveying Services) do not exist in Mexico. The Testing Laboratories industry includes establishments engaged in the provision of laboratory sampling and technical testing services, such as chemical analysis and nondestructive testing. It is located in this subsector because the industries in this industry group are major users of testing laboratory services and because of the processes used in the laboratories. The Specialized Design Services industry group includes establishments providing interior, industrial, graphic and other specialized design services. It should be noted that the Architectural and Engineering Services industries also include establishments that are engaged in providing design services. The Computer Systems Design and Related Services industry group includes establishments providing expertise in the field of information technologies. These establishments provide services such as custom programming services, systems design services, data center management services and technical consulting services. Though custom computer programming is in this sector, the reproduction of packaged software is in the NAICS Manufacturing sector, and software publishing and on-line retrieval services are in the new NAICS Information sector, to be published separately. The Management, Scientific and Technical Consulting Services industry group includes establishments that advise and counsel clients on virtually all aspects of corporate operations, as well as those offering technical advice and counsel on non-management issues. Many kinds of consulting exist in a modern economy. This industry group brings together those consultants who, while having specific expertise, offer a wide range of services to their prospective clients. It is not the clients' business on which the consultants in this industry group have expertise, but rather, they have specialized knowledge with potential applications in a broad range of industries. Accordingly, those establishments that provide consulting services that are closely tied to a specific industry are classified in the sector or group of industries to which they are related. For example, agricultural consultants are included in the Agriculture sector. In addition, establishments that provide consulting services in conjunction with other services as part of an integrated process, or in conjunction with other sales, are excluded. For example, the provision of advice and counsel on financial matters is often related to or incidental to the sale of financial products, and is therefore included in the Finance and Insurance sector. The Scientific Research and Development Services industry group includes establishments engaged in original investigation undertaken on a systematic basis to gain new knowledge (research) and/or in the application of research findings or other scientific knowledge for the creation of new or significantly improved products or processes (experimental development). The industries within this industry group are defined on the basis of the domain of research; that is, on the scientific expertise of the establishment. The Advertising and Related Services industry group includes Advertising Agencies, Public Relations Services, Media Buying Agencies, Media Representatives, Display Advertising, Direct Mail Advertising, Advertising Material Distribution and Other Services Related to Advertising. These establishments are primarily engaged in preparing advertising campaigns, placing advertisements, or the delivery of advertising material to the general public. The Other Professional, Scientific, and Technical Services industry group represents a residual grouping that includes Market Research and Public Opinion Polling, Photography Services, Translation and Interpretation Services, Veterinary Services and other activities that could not be placed within other industry groups. Limitations and Constraints of the Classification Differences in the organization of activities within establishments, and differences in the economic significance of individual industries from country to country, were the major issues faced in the development of a common classification structure for this subsector. These issues were dealt with by grouping activities in a manner that recognized the different levels of integration and diversification of establishments while allowing each country to add industries where necessary to reflect the greater level of specialization or economic significance of particular industries in its national economy. Still, in some instances, proposed NAICS industries in this subsector do not exist in all countries. Establishments that offer services to a broad spectrum of industries, and therefore do not require particular expertise in the client's own industry, are classified in this sector. However, the narrower interpretation imposes limits on studies of a more broadly defined ``professional or knowledge-based sector.'' Uses requiring such a broad definition will require regrouping of NAICS industries in other sectors. The identification of new and emerging industries is one of the principal goals of the NAICS project. Many users have expressed the wish that this goal be achieved while minimizing breaks in time series. However, these two objectives are more often than not conflicting, and the degree to which proposed NAICS industries relate to existing national classification systems varies from country to country. Relationship to ISIC Each of the NAICS industries created in this subsector can be assigned to a division of the current International Standard Industrial Classification of all Economic Activities (ISIC, Revision 3) of the United Nations. The majority of [[Page 26591]] the NAICS industries are contained within ISIC Division 74, Other Business Activities. Other NAICS industries in this sector relate to ISIC Divisions 72, Computer and Related Activities and ISIC Division 73, Research and Development. Changes to the National Classification For Canada, the identification of a significant number of new industries represents the most important change to the 1980 Canadian Standard Industrial Classification (CSIC). Twenty-seven of the 37 proposed NAICS industries applicable in Canada are new. The industries of this sector are, for the most part, currently classified in CSIC 77, Business Service Industries. The expansion is particularly important for legal services (CSIC 7761), computer services (CSIC 7721), advertising services (CSIC 774), scientific and technical services (CSIC 7759) and other business services (CSIC 7799). The Legal Services industry group now contains three industries compared to one in the existing Canadian system. The Offices of Notaries and Other Legal Services industries are new. The current Computer Services industry (CSIC 7721) is split into five industries. The computer systems design and related services component is part of this subsector. The newly created Information sector contains three industries, namely, Software Publishing, On-line Retrieval Services and Data Transaction Processing Services, that were formerly contained in CSIC 7721, but are not placed in the NAICS Professional, Scientific and Technical Services subsector. Computer rental and leasing is now classified in the Rental and Leasing subsector of NAICS. The Advertising Services industry group (CSIC 774) expands to eight industries from the current four. The new industries are Public Relations Services, Media Buying Agencies, Direct Mail Advertising, and Advertising Material Distribution. Nine of the proposed NAICS industries are components of the Other Scientific and Technical Services Industry (CSIC 7759). This includes Drafting Services, Landscape Architecture Services, Surveying and Mapping Services, Geophysical Surveying Services, Environmental Consulting Services, Testing Laboratories and the three proposed Scientific Research and Development Services industries. The proposed industries for Interior Design Services, Translation and Interpretation Services, Document Preparation Services, Telephone Call Centers and Packaging and Labeling Services are components of CSIC 7799, Other Business Services n.e.c. Various parts of this industry are reassigned to new NAICS industries. Other significant changes include the creation of two industries from CSIC 7771, Management Consulting Services (Management Consulting and Management Services) and the splitting of a Graphic Design Services industry from CSIC 7749, Other Advertising Services. The majority of proposed NAICS industries (22) relate to only one existing CSIC industry. In those cases, the task of linking statistics based on the old and new systems is relatively easy. For the remaining classes, this task is much more difficult since they are defined in terms of components of existing industries for which no data are available. However, many of these partial relationships are marginal in terms of economic activity. For Mexico, 24 CMAP industries are included in this subsector: four industries have one-to-one correspondence with NAICS; four CMAP industries were combined to form one NAICS industry class; two other industries were merged with parts of other industry classes to form two new NAICS industries; and of the remaining fourteen CMAP industry classes, 27 industries were created for this subsector in the NAICS. Some of the new or revised industries reflect an increasing degree of specialization in this subsector in Mexico. Services that were offered in combination within the same establishment, even when one of these services was a secondary activity, are now provided separately by establishments that specialize in only one activity. Therefore, in this new classification system there are industries that were not even mentioned in CMAP, because they were formerly either secondary activities or included with other activities. The activities that are incorporated into this subsector are currently classified in branch 9510 of the CMAP, Provision of Professional Services, Technical and Specialized. However, to fill out the new subsector some activities were relocated that were found in other CMAP branches or subsectors or even from other activity sectors. From CMAP Subsector 92, Services of Education, Investigation, Medicine, Welfare and Civil and Religious Associations, the scientific investigation services performed by the private sector and the public sector (CMAP classes 922100 and 922200, respectively) were reclassified into three classes: Research and Development in the Physical and Engineering Services; Research and Development in the Life Sciences; and Research and Development in the Social Sciences and Humanities. CMAP Subsector 94, Cultural, Recreational, and Sports Services, included establishments that are devoted to personnel contracting for theatrical and cinematographic works (CMAP classes: 941101, Private Production of Cinematographic Movies; 941106, Private Promotion Services, Assembly and Artistic Spectacles Presentation; and in 941204, Promotion and Assembly Public Service and Artistic Spectacles Presentation). These contracting agencies are joined to the agencies of personnel placement to form a single NAICS class. CMAP Class 952002, Various Personal Services, Photographic Services is reclassified to NAICS Photography Services. Two classes of CMAP Branch 9510 are not included in this subsector: CMAP class 951014, News Agency Services, and CMAP 951016, Photograph and Movies Developing Services. The first is reclassified to the sector for Information and the second is included in the Arts, Entertainment and Recreation subsector. For the rest of the classes of CMAP Branch 9510, the most important changes are the separations of the CMAP classes 951005, Services of Advising and Technical Studies of Engineering and Architecture; 951008, Services of Advertising and Related Activities; 951010, Advising Services in Administration and Organization of Businesses, and 951023, Other Professional Services, Technical and Specialized, not mentioned previously. The creation of new product classes resulting from the separation is based on two fundamental criteria: on the one hand, the specificity concerning production function and, additionally, the perspective of growth in the future. The CMAP class 951005, Services of Engineering and Architecture Consulting and Mechanical Studies, is split into six parts; the first five are identified by their very specific production functions: Architectural Services, Engineering Services, Surveying and Mapping Services, Geophysical Surveying Services and Testing Laboratories. The sixth part (prototypes design) is combined with the services of urban planners and with the services of mode designers (located within the current CMAP class 951023), to become NAICS industry Other Specialized Design Services. The current class Advertising and Related Activities (CMAP 951008) is split into eight NAICS industries: [[Page 26592]] Advertising Agencies, Media Purchasing Agencies, Media Representation Agencies, Advertising Agencies, Direct Mail Agencies, Direct Mail Advertising Agencies, Commercial Event and Convention Organizers, and Other Services Related to Advertising. The current CMAP class 951010, Administration and Organization Advising Services, is split into five NAICS industries: Administrative Consultants, Public Relations Services, Translation and Interpretation Services, Organizing Services, and Other Scientific and Technical Consultancy Services. Finally, certain activities in current CMAP class 951023, Other Professional Services, Technical and Specialized Not Mentioned Previously, are now NAICS industries. For the United States, of the 37 proposed NAICS industries, 23 are new. Of the 23 new industries in this subsector, eight were created from 1987 SIC 7389, Business Services, Not Elsewhere Classified. This former NEC industry had become a ``catch-all'' category that included some of the fastest growing services in the U.S. economy, in a grouping that had no natural interpretation or usefulness. Its size is significantly reduced by the creation of the new industries in this subsector. Examples of new industries that were created from 1987 SIC 7389 are: Other Legal Services, Drafting Services, Building Inspection Services, Interior Design Services, Industrial Design Services, and Translation and Interpretation Services. In addition, other activities formerly included in SIC 7389 were redistributed among the industries to create homogeneous industries or industry groupings. The redistributions out of 1987 SIC 7389 will reduce its overall size by approximately 40% of the establishments and receipts. In addition, the remainder are redistributed into NAICS industry groups that have more logic and coherence than the 1987 SIC 73 major group. The NAICS industry group Accounting, Tax Preparation, Bookkeeping and Payroll Services includes the services of accountants, tax preparers, bookkeepers, and payroll services. The inclusion of tax preparation services represents a significant change; these services are currently included in 1987 SIC Major Group 72, Personal Services. Accounting services were previously grouped with bookkeeping; the NAICS structure separates these two activities. The NAICS industry group Architectural, Engineering and Related Services groups three previously existing services industries (1987 SICs 8711, 8712, 8713), one previously existing industry from Agriculture (1987 SIC 0781) and includes two new industries. The NAICS industry group Other Specialized Design Services includes new industries for Interior Design Services, Industrial Design Services and Graphic Design Services. The NAICS industry group Management, Scientific and Technical Consulting includes one significant change. It includes a separate industry for Environmental Consulting Services. This service is included in 1987 SIC 8999, Services Not Elsewhere Classified. The NAICS industry group for Scientific Research and Development Services changes the focus from the source of funding (commercial versus non commercial) to the domain of research, that is, physical sciences, life sciences, and social sciences. The NAICS industry group Other Professional, Scientific and Technical Services includes Photography Services that are in 1987 SIC's 7221, Photographic Studios, Professional, and 7335, Commercial Photography. The U.S. will continue to separate these industries in its 5-digit industry detail. Achievement of Objectives The proposed classification meets the objectives for the North American Industry Classification System. It is comprised of 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. 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 most industry levels of the NAICS structure, though a number of exceptions exist, as noted in the ``Limitations and Constraints of Classification'' above. The proposed NAICS structure also introduces a number of new and emerging industries by expanding the current classification systems of each country for business and professional service industries. 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 VI, 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 VI 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 descriptions description code ---------------------------------------------------------------------------------------------------------------- XX................. Professional, Scientific and Technical Services: XXX................ Legal Services: XXXX............... Offices of Lawyers........ E 8111 Legal Services. XXXX............... Offices of Notaries....... L ....... Null Set for U.S. XXXX............... Other Legal Services...... N *7389 Business Services, NEC (process services, patent agents, notaries public, paralegal services). XXX................ Accounting, Tax Preparation, Bookkeeping and Payroll Services: XXXX............... Offices of Accountants: [[Page 26593]] XXXXX.............. Offices of Certified N *8721 Accounting, Auditing, and Public Accountants. Bookkeeping Services (certified public accountants). XXXXX.............. Offices of Accountants, N *8721 Accounting, Auditing, and Except Certified. Bookkeeping Services (accountants, except certified public accountants). XXXX............... Tax Preparation, Bookkeeping and Payroll Services: XXXXX.............. Tax Preparation Services. E 7291 Tax Return Preparation Services. XXXXX.............. Bookkeeping and Billing N *8721 Accounting, Auditing, and Services. Bookkeeping Services (bookkeeping and billing). XXXXX.............. Payroll Services......... N *7819 Services Allied to Motion Picture Production (talent payment services). 8721 Accounting, Auditing, and Bookkeeping Services (payroll services). XXX................ Architectural, Engineering and Related Services: XXXX............... Architectural Services.... E 8712 Architectural Services. XXXX............... Engineering Services...... E 8711 Engineering Services. XXXX............... Drafting Services......... N *7389 Business Services, NEC (drafting service). XXXX............... Building Inspection N *7389 Business Services, NEC (home and Services. building inspection services). XXXX............... Landscape Architecture E 0781 Landscape Counseling and Services. Planning. XXXX............... Surveying and Mapping N *7389 Business Services, NEC (map Services. making services). *8713 Surveying Services (except geophysical surveying). XXXX............... Geophysical Surveying N *8713 Surveying Services (geophysical Services. surveying). XXXX............... Testing Laboratories...... R *8734 Testing Laboratories (except veterinary testing laboratories). XXX................ Specialized Design ................ ................................. Services:. XXXX............... Interior Design Services.. N *7389 Business Services, NEC (interior design). XXXX............... Industrial Design Services N *7389 Business Services, NEC (industrial design). XXXX............... Graphic Design Services... R 7336 Commercial Art and Graphic Design. *8099 Health and Allied Services, NEC (medical artists). XXXX............... Other Specialized Design Services: XXXXX.............. Land Use Planners N *8748 Business Consulting Services, NEC Services. (planners of land use). XXXXX.............. All Other Design Services N *7389 Business Services, NEC (fashion, furniture, and other design services). XXX................ Computer Systems Design and Related Services: XXXX............... Computer Systems Design and Related Services: XXXXX.............. Custom Computer E 7371 Computer Programming Services. Programming Services. XXXXX.............. Systems Design Services.. N 7373 Computer Integrated Systems Design. *7379 Computer Related Services, NEC (computer systems consultants). XXXXX.............. Computer Facilities E 7376 Computer Facilities Management Management Services. Services. XXXXX.............. Other Computer Systems R *7379 Computer Related Services, NEC Design and Related (except computer systems Services. consultants). XXX................ Management, Scientific and Technical Consulting Services: XXXX............... Management Consulting Services: XXXXX.............. Administrative and N *8742 Management Consulting Services General Management (administrative management and Consulting. general management consulting). XXXXX.............. Human Resources N *8742 Management Consulting Services Consulting. (human resources and personnel management consulting). *7361 Employment Agencies (executive placement services). XXXXX.............. Marketing Consulting..... N *8742 Management Consulting Services (marketing consulting). XXXXX.............. Process, Physical, N *8742 Management Consulting Services Distribution and (manufacturing management, Logistics Consulting. physical distribution, and site location consulting). XXXXX.............. Other Management N *4731 Arrangement of Transportation of Consulting Services. Freight and Cargo (tariff consulting). *8748 Business Consulting Services, NEC (safety consulting). XXXX............... Environmental Consulting N *8999 Services, NEC (environmental Services. consultants). XXXX............... Other Scientific and N *8748 Business Consulting Services, NEC Technical Consulting (economic, radio, and traffic Services. consultants). *8999 Services, NEC (nuclear consultants, geologists, physicists and actuarial consulting). XXX................ Scientific Research and ................ ................................. Development Services:. XXXX............... Research and Development N *8731 Commercial Physical and in the Physical and Biological Research (physical Engineering Sciences. and engineering sciences). *8733 Noncommercial Research Organizations (physical and engineering services). [[Page 26594]] XXXX............... Research and Development N *8731 Commercial Physical and in the Life Sciences. Biological Research (life sciences). *8733 Noncommercial Research Organizations (life sciences). XXXX............... Research and Development N *8732 Commercial Economic, in the Social Sciences Sociological, and Educational and Humanities. Research (social sciences and humanities). *8733 Noncommercial Research Organizations (social sciences and humanities). XXX................ Advertising and Related ................ ................................. Services:. XXXX............... Advertising Agencies...... E 7311 Advertising Agencies. XXXX............... Public Relations Services. E 8743 Public Relations Services. XXXX............... Media Buying Agencies..... N *7319 Advertising, NEC (media buying services). XXXX............... Media Representatives..... E 7313 Radio, Television, and Publishers' Advertising Representatives. XXXX............... Display Advertising....... N 7312 Outdoor Advertising Services. *7319 Advertising, NEC (display advertising, except outdoor). XXXX............... Direct Mail Advertising... E 7331 Direct Mail Advertising Services. XXXX............... Advertising Material N *7319 Advertising, NEC (advertising Distributors. materials distributor). XXXX............... Other Services Related to N *7319 Advertising, NEC (except media Advertising. buying, display advertising, except outdoor; and advertising material distributors). *5199 Nondurable Goods, NEC (advertising specialities goods distributors). XXX................ Other Professional, Scientific and Technical Services: XXXX............... Market Research and Public N *8732 Commercial Economic, Opinion Polling. Sociological, and Educational Research (market research and opinion research). XXXX............... Photography Services: XXXXX.............. Photography Studios, E 7221 Photographic Studios, Portrait. Portrait. XXXXX.............. Commercial Photography... R 7335 Commercial Photography. *8099 Health and Allied Services, NEC (medical photography). XXXX............... Translation and N *7389 Business Services, NEC Interpretation Services. (translation and interpretation services). XXXX............... Veterinary Services....... E 0741 Veterinary Services for Livestock. *0742 Veterinary Services for Animal Specialties XXXX............... All Other Professional, N 7389 Business Services, NEC Scientific and Technical (appraisers, except insurance Services.. and real estate, and miscellaneous professional, scientific, and technical services). ---------------------------------------------------------------------------------------------------------------- The definitions of status codes are as follows: E--existing industry; L--null industry for the U.S.; 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 ---------------------------------------------------------------------------------------------------------------- 0741.................................... Veterinary Services for Veterinary Services (pt.). Livestock. 0742.................................... Veterinary Services for Animal Veterinary Services (pt.). Specialties. 0781.................................... Landscape Counseling and Landscape Architecture Services. Planning. 4731.................................... Arrangement of Transportation of Freight and Cargo: Tariff Consulting............. Other Management Consulting Services (pt.). 5199.................................... Nondurable Goods, NEC: Advertising Specialities Goods Other Services Related to Distributors. Advertising (pt.). 7221.................................... Photographic Studios, Portrait.. Photographic Studios, Portrait. 7291.................................... Tax Return Preparation Services. Tax Preparation Services. 7311.................................... Advertising Agencies............ Advertising Agencies. 7312.................................... Outdoor Advertising Services.... Display Advertising (pt.). 7313.................................... Radio, Television, and Media Representatives. Publishers' Advertising Representatives. 7319@................................... Advertising, NEC: Media Buying Services......... Media Buying Agencies. Display Advertising, Except Display Advertising (pt.). Outdoor. Advertising Materials Advertising Material Distributors. Distributor. Other......................... Other Services Related to Advertising (pt.). 7331.................................... Direct Mail Advertising Services Direct Mail Advertising. 7335.................................... Commercial Photography.......... Commercial Photography (pt.). 7336.................................... Commercial Art and Graphic Graphic Design Services (pt.). Design. 7361.................................... Employment Agencies: Executive Placement Services.. Human Resources Consulting (pt.). 7371.................................... Computer Programming Services... Custom Computer Programming Services. 7373.................................... Computer Integrated Systems Systems Design Services (pt.). Design. 7376.................................... Computer Facilities Management Computer Facilities Management Services. Services. [[Page 26595]] 7379.................................... Computer Related Services, NEC: Computer Systems Consultants.. Systems Design Services (pt.). Except Computer Systems Other Computer Systems Design and Consultants. Related Services. 7389@................................... Business Services, Not Elsewhere Classified: Process Services, Patent Other Legal Services. Agents, Notaries Public and Paralegal Services. Mapmaking Services............ Surveying and Mapping Services (pt.). Interior Design............... Interior Design Services. Industrial Design............. Industrial Design Services. Drafting Service.............. Drafting Services. Fashion, Furniture and Other All Other Design Services. Design Services. Translation and Interpretation Translation and Interpretation Services. Services. Home and Building Inspection Building Inspection Services. Services. Appraisers, Except Insurance All Other Professional, Scientific and Real Estate, and Technical Services. Miscellaneous Professional, Scientific, and Technical Services. 7819.................................... Services Allied to Motion Picture Production: Talent Payment Services....... Payroll Services (pt.). 8099.................................... Health and Allied Services, NEC: Medical Artists............... Graphic Design Services (pt.). Medical Photography........... Commercial Photography (pt.). 8111.................................... Legal Services.................. Offices of Lawyers. 8711.................................... Engineering Services............ Engineering Services. 8712.................................... Architectural Services.......... Architectural Services. 8713.................................... Surveying Services: Except Geophysical Surveying.. Surveying and Mapping Services (pt.). Geophysical Surveying Services Geophysical Surveying Services. 8721@................................... Accounting, Auditing, and Bookkeeping Services: Certified Public Accountants.. Offices of Certified Public Accountants. Accountants, Except Certified Offices of Accountants, except Public Accountants. Certified. Payroll Services.............. Payroll Services. 8731@................................... Commercial Physical and Biological Research: Physical and Engineering Research and Development in the Sciences. Physical and Engineering Sciences (pt.). Life Sciences................. Research and Development in the Life Sciences (pt). 8732@................................... Commercial Economic, Sociological, and Educational Research: Social Sciences and Humanities Research and Development in the Social Sciences and Humanities (pt.). Market Research and Opinion Market Research and Public Opinion Research. Polling. 8733@................................... Noncommercial Research Organizations: Physical and Engineering Research and Development in the Services. Physical and Engineering Sciences (pt.). Life Sciences................. Research and Development in the Life Sciences (pt.). Social Sciences and Humanities Research and Development in the Social Sciences and Humanities (pt.). 8734.................................... Testing Laboratories............ Testing Laboratories. 8742@................................... Management Consulting Services: Administrative Management and Administrative and General General Management Consulting. Management Consulting. Human Resources and Personnel Human Resources Consulting (pt.). Management Consulting. Marketing Consulting.......... Marketing Consulting. Manufacturing Management, Process, Physical, Distribution, and Physical Distribution, and Logistics Consulting. Site Location Consulting. 8743.................................... Public Relations Services....... Public Relations Services. 8748@................................... Business Consulting Services, Not Elsewhere Classified: Planners of Land Use.......... Land Use Planners Services. Safety Consulting............. Other Management Consulting Services. Economic Consultants, Radio Other Scientific and Technical Consultants, Traffic Consulting Services (pt.). Consultants. 8999@................................... Services, NEC: Nuclear Consultants, Other Scientific and Technical Consulting Geologists, Consulting Services (pt.). Consulting Physicists, and Actuarial Consulting. Environmental Consultants..... Environmental Consulting. ---------------------------------------------------------------------------------------------------------------- The abbreviation ``pt'' means ``part of''. @ means time series break has been created that is greater than 3% of the 1992 revenues for the 1987 SIC Industry. The abbreviation NEC is used for Not Elsewhere Classified. [[Page 26596]] Description of Changes to the U.S. System Forty-eight U.S. industries are included in the NAICS Professional, Scientific, and Technical Services subsector. Thirty-one of these are new industries (Offices of Notaries, as defined, do not exist in the U.S.); four are revised 1987 SIC industries; and 13 are industries that existed in 1987. The primary focus of this subsector is to group together establishments that make available the particular knowledge, expertise or skills of their employees to a wide range of business and individual clients. The activities included here can be utilized throughout all sectors of the economy. Other activities that do not meet this criteria are generally included in the particular subsector they serve. The industries within this subsector have similar production processes. The changes also help to better achieve comparability with Mexico and Canada. The following new industries were added for 1997: Other Legal Services from part of 1987 SIC 7389, Business Services, NEC. Offices of Certified Public Accountants from part of 1987 SIC 8721, Accounting, Auditing, and Bookkeeping Services. Offices of Accountants, Except Certified from part of 1987 SIC 8721, Accounting, Auditing, and Bookkeeping Services. Bookkeeping and Billing Services from part of 1987 SIC 8721, Accounting, Auditing, and Bookkeeping Services. Payroll Services from part of 1987 SIC 7819, Service Allied to Motion Picture Production, and part of 1987 SIC 8721, Accounting, Auditing, and Bookkeeping Services. Drafting Services from part of 1987 SIC 7389, Business Services, NEC. Building Inspection Services from part of 1987 SIC 7389, Business Services, NEC. Surveying and Mapping Services from part of 1987 SIC 8713, Surveying Services, and part of 1987 SIC 7389, Business Services, NEC. Geophysical Surveying Services from part of 1987 SIC 8713, Surveying Services. Interior Design Services from part of 1987 SIC 7389, Business Services, NEC. Industrial Design Services from part of 1987 SIC 7389, Business Services, NEC. Land Use Planners Services from part of 1987 SIC 8748, Business Consulting Services, NEC. All Other Design Services from part of 1987 SIC 7389, Business Services, NEC. Systems Design Services from 1987 SIC 7373, Computer Integrated Systems Design, and part of 1987 SIC 7379, Computer Related Services, NEC. Administrative and General Management Consulting from part of 1987 SIC 8742, Management Consulting Services. Human Resources Consulting from part of 1987 SIC 8742, Management Consulting Services, and part of 1987 SIC 7361, Employment Agencies. Marketing Consulting from part of 1987 SIC 8742, Management Consulting Services. Process, Physical Distribution, and Logistics Consulting from part of 1987 SIC 8742, Management Consulting Services. Other Management Consulting Services from part of 1987 SIC 4731, Arrangement of Transportation of Freight and Cargo, and part of 1987 SIC 8748, Business Consulting Services, NEC. Environmental Consulting from part of 1987 SIC 8999, Services NEC. Other Scientific and Technical Consulting Services from part of 1987 SIC 8748, Business Consulting Services, NEC, and part of 1987 SIC 8999, Services, NEC. Research and Development in the Physical and Engineering Sciences from part of 1987 SIC 8731, Commercial Physical and Biological Research, and part of 1987 SIC 8733, Noncommercial Research Organizations. Research and Development in the Life Sciences from part of 1987 SIC 8731, Commercial Physical and Biological Research, and part of 1987 SIC 8733, Noncommercial Research Organizations. Research and Development in the Social Sciences and Humanities from part of 1987 SIC 8732, Commercial Economic, Sociological, and Educational Research, and part of 1987 SIC 8733, Noncommercial Research Organizations. Media Buying Agencies from part of 1987 SIC 7319, Advertising, NEC. Display Advertising from 1987 SIC 7312, Outdoor Advertising Services, and part of 1987 SIC 7319, Advertising, NEC. Advertising Material Distributors from part of 1987 SIC 7319, Advertising, NEC. Other Services Related to Advertising from part of 1987 SIC 5199, Nondurable Goods, NEC, and part of 1987 SIC 7319, Advertising, NEC. Market Research and Public Opinion Polling from part of 1987 SIC 8732, Commercial Economic, Sociological, and Educational Research. Translation and Interpretation Services from part of 1987 SIC 7389, Business Services, NEC. All Other Professional, Scientific and Technical Services from part of 1987 SIC 7389, Miscellaneous Business Services. The following four NAICS industries were modified from their 1987 definitions: Testing Laboratories from 1987 SIC 8734, Testing Laboratories. This industry was modified by moving veterinary laboratories to the Support Services for Agriculture subsector. This move was made to improve comparability with Canada and Mexico and because the production process of this type of laboratory was so different from the others that are included. Graphic Design Services from 1987 SIC 7336, Commercial Art and Graphic Design, and part of 1987 SIC 8099, Health and Allied Services, NEC. Medical artists of 1987 SIC 8099 were combined here because of the similarity of the production process with graphic designers and to improve comparability with Mexico and Canada. Other Computer Systems Design and Related Services from part of 1987 SIC 7379, Computer Related Services, NEC. This industry was modified by moving computer systems consultants to NAICS industry Systems Design Services to improve comparability with Mexico and Canada. Commercial Photography from 1987 SIC 7335, Commercial Photography, and from part of 1987 SIC 8099, Health and Allied Services, NEC. Medical photography from 1987 SIC 8099 was combined with commercial photography because of the similarity of their production processes. Part VII--Proposed New Industry Structure for Performing Arts, Spectator Sports and Related Industries; Museums, Historical Sites and Similar Institutions; and Recreation, Amusement and Gambling Section A--NAICS Structure North American Industry Classification System (NAICS) Agreement Number 17 This Document represents the proposed agreement on the structure of the North American Industry Classification System (NAICS) for the following industries: Performing Arts, Spectator Sports and Related Industries Museums, Historical Sites and Similar Institutions Recreation, Amusement and Gambling 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 [[Page 26597]] 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 Performing Arts, Spectator Sports and Related Industries XXX Performing Arts Companies XXXX Theater Companies XXXX Dance Companies XXXX Musical Groups and Artists XXXX Other Performing Arts Companies XXX Spectator Sports XXXX Spectator Sports XXX Promoters of Arts, Sports and Similar Events XXXX Promoters of Arts, Sports and Similar Events with Facilities XXXX Promoters of Arts, Sports and Similar Events without Facilities XXX Agents and Managers for Artists, Athletes and Other Entertainers XXXX Agents and Managers for Artists, Athletes and Other Entertainers XXX Independent Artists, Writers and Performers XXXX Independent Artists, Writers and Performers XX Museums, Historical Sites and Similar Institutions XXX Museums, Historical Sites and Similar Institutions XXXX Museums XXXX Historical Sites XXXX Botanical and Zoological Gardens XXXX Nature Parks and Similar Institutions XX Recreation, Amusement and Gambling Industries XXX Sports and Recreation Facilities XXXX Golf Courses XXXX Skiing Facilities XXXX Marinas XXXX Recreational, Sports and Fitness Centers XXXX Bowling Centers XXX Amusement Facilities XXXX Amusement and Theme Parks XXXX Amusement Arcades and Other Coin-operated Amusement Devices XXX Gambling Industries XXXX Casinos, except Hotel Casinos XXXX Other Gambling Industries XXX Other Recreation and Amusement Services XXXX Other Recreation and Amusement Services Attachment 2--North American Industrial Classification System Draft Classification for: Performing Arts, Spectator Sports and Related Industries Museums, Historical Sites and Similar Institutions Recreation, Amusement and Gambling Industries Representatives of the statistical agencies of Canada, Mexico, and the United States agree to a draft industry classification for these industries. The draft classification contains three subsectors, Performing Arts, Spectator Sports and Related Industries; Museums, Historical Sites and Similar Institutions; and Recreation, Amusement and Gambling Industries. These are further subdivided into ten industry groups and twenty-three industries. A General Outline The Performing Arts, Spectator Sports and Related Industries subsector includes establishments that produce or organize live presentations involving the performances of actors and actresses, singers, dancers, musical groups and artists, athletes and other entertainers. It also includes independent entertainers and the establishments that manage their careers. The classification recognizes four basic processes: producing events; presenting and promoting events; managing and representing entertainers; and finally, providing the artistic, creative and technical skills necessary to the production of these live events. Four industries are proposed for performing arts, each defined on the basis of the particular skills of the entertainers involved in the presentations. Promoters that own and operate their facilities are distinguished from those that do not, thereby emphasizing significant differences in cost structures. The proposed structure makes a clear distinction between performing arts companies and performing artists (independents). Although not unique to arts and entertainment, freelancing is a particularly important phenomenon in the Performing Arts, Spectator Sports, and Related Industries subsector. Distinguishing this activity from the production activity is a meaningful process differentiation. This approach, however, is difficult to implement in the case of musical groups (companies) and artists, especially pop groups. These establishments tend to be more loosely organized and it can be difficult to distinguish companies from freelancers. For those reasons, NAICS includes one industry that covers both musical groups and musical artists. The proposed NAICS structure contains two industries for Promoters of Arts, Sports and Similar Events, one for those that operate facilities and another for those that do not. It is therefore necessary for users interested in information by type of event (e.g. performing arts as opposed to sports) to rely on product data. The Museums, Historical Sites and Similar Institutions subsector includes establishments engaged in the preservation and exhibition of objects, sites and natural wonders of historical, cultural and educational value. The four industries of this subsector are Museums; Historic Sites; Botanical and Zoological Gardens; and Nature Parks and Similar Institutions. The Recreation, Amusement and Gambling Industries subsector comprises three industry groups. The Sports and Recreation Facilities industry group includes establishments that operate and provide access to facilities where patrons can actively participate in sports and recreational activities. The six industries of this industry group represent the most important types of facilities found in North America. The Amusement Facilities industry group contains establishments that operate and provide access to sites and facilities primarily used for amusement purposes. Finally, the Gambling Industries industry group includes operators of casinos, lotteries, bingo halls and other establishments primarily engaged in gambling activities. Limitations and Constraints of the Classification The most important limitation of the proposed structure is the incomplete coverage of recreational activities. Providers of recreational services are often engaged in processes classified in other sectors of NAICS. For example, operators of resorts and hunting and fishing camps provide both accommodation and recreational facilities and services. It is proposed to classify these establishments in the Accommodation Services subsector, partly to reflect the significant costs associated with the provision of accommodation services and partly to ensure consistency with international standards. Similarly, some night clubs present live entertainment on a regular basis and it can be argued that they could be classified in the Promoters of Arts, Sports and Similar Events With Facilities industry. However, since most [[Page 26598]] of these establishments function as any other drinking place when they do not stage entertainment and furthermore because most of their revenue is derived from sale of food and beverages, it is proposed to classify them with other drinking places. Finally, establishments using transportation equipment to provide sightseeing and pleasure cruises are classified in the Transportation sector. The proposed Gambling Industries group does not provide for full coverage of gambling activities. It only includes those establishments specializing in such activities. Casino hotels are classified in the Accommodation Services subsector while horse and dog racing tracks are classified in the Spectator Sports industry group. Relationship to ISIC Each of the NAICS industries created in these subsectors can be assigned to a division of the current International Standard Industrial Classification of all Economic Activities (ISIC, Revision 3) of the United Nations. Nineteen of the twenty-four proposed industries are contained within ISIC Division 92, Recreational, Cultural, and Sporting Activities. The five industries not in ISIC Division 92 are small pieces of ISIC Division 60, Land Transport, Transport Via Pipelines; ISIC Division 63, Supporting and Auxiliary Transport Activities, Activities of Travel Agencies; ISIC Division 70, Real Estate Activities; and ISIC Division 74, Other Business Activities. The discrepancies between these proposed NAICS industries and ISIC are minor and do not have a significant impact on the comparability of the data. Some Changes to the National Classifications For Canada, the proposed NAICS structure constitutes a restructuring and expansion of industries currently found in major group 96, Amusement and Recreational Service Industries, of the 1980 Canadian Standard Industrial Classification (CSIC). A few activities classified in other areas of the classification are now included in this structure and industry groups CSIC 961, Motion Picture, Audio and Video Production and Distribution, and CSIC 962, Motion Picture Exhibition are moved to the proposed Information sector. The activities included in the Performing Arts Companies industry group are all part of CSIC 9631, Entertainment Production Companies, except for circuses (CSIC 9692) and dinner theaters (CSIC 9211). The remaining components of CSIC 9631, Promoters of Artistic Events and Independent Artists, are assigned to different NAICS industries. The NAICS Spectator Sports industry corresponds to CSIC 964, Commercial Spectator Sports, except for promoters of sports events that are now classified in a newly created industry group for Promoters (presenters) of Arts, Sports and Similar Events. In the CSIC, promoters are closely associated to the type of event they are promoting (arts, sports, fairs, etc.) and are classified in different industries. The approach adopted for NAICS, that of combining all promoters in the same group, therefore represents a significant change to the current practice. A similar approach is proposed for Agents and Managers for Artists, Athletes and Other Entertainers and for Independent Artists, Writers and Performers. Agents and managers, currently classified in arts, sports or business service depending on the type of client they represent, are grouped in a single NAICS industry. Similarly, independent artists, writers and performers, currently found in four industries, are combined in one class. The Museums, Historical Sites and Similar Institutions industry group includes activities that are classified in Education (Museums, Heritage and Historic Sites) and Amusement and Recreation (botanical gardens, zoological gardens, nature parks, exhibition centers, etc.). Three of the five industries proposed for the operators of Sports and Recreational Facilities industry group already exist in the CSIC. The most significant change in this area is the adoption of a Recreational, Sports and Fitness Centers industry that includes components of three existing classes, namely, CSIC 9652, Curling clubs; CSIC 9659, Other Sports and Recreation Clubs; and CSIC 9799, Other Personal and Household Services. Finally, the proposed Gambling Industries categories are components of CSIC 9961, Gambling Industries. At the national level, an additional industry will be created for Lotteries. For Mexico, the contents of these subsectors essentially stem from the CMAP subsector 94, Entertainment, Culture, Recreation and Sports, although an important restructuring has occurred. In addition, some classes of CMAP subsector 94 related to motion pictures, radio and television went into the proposed NAICS Information sector, and those related to the teaching of gymnastics and martial arts moved to the proposed NAICS Education Services subsector. In order to accommodate this proposed structure of new subsectors, Mexico included some activities from other subsectors such as tour guide services, marinas, and the retail sale of lottery tickets. For the United States, the proposed NAICS structure represents a significant change from the current Standard Industrial Classification System (SIC) system. The NAICS industries are more clearly defined than those in the current system and ambiguous distinctions such as ``membership'' criteria have been eliminated in NAICS industries. New industries are established for various types of performing arts companies, spectator sports, museums, historical sites and similar institutions, gambling services and operators of sports and recreation facilities. Overall, there are nine new industries in the NAICS structure for amusement, recreation, museums and botanical and zoological gardens. Separate industries are established for promoters of events, agents and managers of artists, athletes, and entertainers, as well as a new industry for artists and entertainers who normally work independently or on a contract basis. These types of establishments are included in many different industries in the SIC system, including some in 1987 SIC 8999, Services, Not Elsewhere Classified (NEC), as well as in other NEC categories, such as 1987 SIC 7999, Amusement and Recreation Services, Not Elsewhere Classified. The ``not elsewhere classified (NEC)'' industries in the 1987 SIC system are significantly reduced in NAICS, because many types of establishments in this category are assigned to more specific, process- based categories. Achievement of Objectives The proposed classification structure 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. The hierarchical structure of the classification generally follows the production concept at each level. The classification achieves comparability for the three participating countries. Based on existing data, each country expects to be able to publish data regularly or in the near future at the industry (4-digit) level of this structure. All countries agree on the definitions of the industries. Other objectives of the NAICS project have also been met. The inclusion of [[Page 26599]] new and emerging services industries are introduced in this proposed structure. These classifications reflect changes in the arts, entertainment, and recreation industries that have occurred in the past but have never been identified in the existing classification systems of the three countries. The industries in most cases are economically significant in all three countries. Smaller industries are present because comparability is given priority over size. 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 three NAICS industry subsectors presented in Part VII, 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 three NAICS industry subsectors covered in Part VII 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................. Performing Arts, Spectator Sports and Related Industries: XXX................ Performing Arts Companies: XXXX............... Theater Companies......... N *5812 Eating Places (dinner theaters). ................ *7922 Theatrical Producers (except Motion Pictures) and Miscellaneous Theatrical Services (theater companies, opera companies). XXXX............... Dance Companies........... N *7922 Theatrical Producers (except Motion Pictures) and Miscellaneous Theatrical Services (ballet and dance companies). XXXX............... Musical Groups and Artists N *7929 Bands, Orchestras, Actors, and Entertainment Groups (musical groups and artists). XXXX............... Other Performing Arts N *7929 Bands, Orchestras, Actors, and Companies. Entertainment Groups (except musical groups and artists). ................ *7999 Amusement and Recreation Services, Not Elsewhere Classified (circus companies). XXX................ Spectator Sports: XXXX............... Spectator Sports: XXXXX.............. Sports Clubs............. N *7941 Professional Sports Clubs and Promoters (professional sports clubs). XXXXX.............. Race Tracks.............. N *7948 Racing, Including Track Operations (track operations). XXXXX.............. Other Spectator Sports... N *7941 Professional Sports Clubs and Promoters (except sports clubs, stadium operators, sports promoters and agents). ................ *7948 Racing, Including Track Operations (except track operators). ................ *7999 Amusement and Recreation Services, NEC (professional athletes). XXX................ Promoters of Arts, Sports and Similar Events: XXXX............... Promoters of Arts, Sports N *6512 Operators of Nonresidential and Similar Events with Buildings (stadium and arena Facilities. owners). ................ *7922 Theatrical Procedures (except Motion Pictures) and Miscellaneous Theatrical Services (theater operators). ................ *7941 Professional Sports Clubs and Promoters (stadium operators). XXXX............... Promoters of Arts, Sports N *7922 Theatrical Producers (except and Similar Events Motion Pictures) and without Facilities. Miscellaneous Theatrical Services (theatrical promoters). ................ *7941 Professional Sports Clubs and Promoters (sports promoters). XXX................ Agents and Managers for Artists, Athletes and Other Entertainers: XXXX............... Agents and Managers for N *7389 Business Services, NEC (agents Artists, Athletes, and and brokers for authors and Other Entertainers. artists). ................ *7922 Theatrical Producers (except Motion Pictures) and Miscellaneous Theatrical Services (theatrical agents). ................ *7941 Professional Sports Clubs and Promoters (sports agents). XXX................ Independent Artists, Writers, and Performers: XXXX............... Independent Artists, N *7819 Services Allied to Motion Picture Writers, and Performers. Production (film directors and related motion picture production services, independent). ................ *7929 Bands, Orchestras, Actors, and Other Entertainers and Entertainment Services (actors and actresses). ................ *8999 Services, Not Elsewhere Classified (authors, artists, and related technical services independent). XX................. Museums, Historical Sites and Similar Institutions: XXX................ Museums, Historical Sites and Similar Institutions: XXXX............... Museums................... R *8412 Museums and Art Galleries (except historic and heritage sites). XXXX............... Historical Sites.......... N *8412 Museums and Art Galleries (historic and heritage sites). [[Page 26600]] XXXX............... Botanical and Zoological R *8422 Arboreta and Botanical and Gardens. Zoological Gardens (except nature parks and reserves). XXXX............... Nature Parks and Similar N *7999 Amusement and Recreation Institutions. Services, NEC (caverns and miscellaneous commercial parks). ................ *8422 Arboreta and Botanical and Zoological Gardens (nature parks and reserves). XX................. Recreation, Amusement and Gambling Industries: XXX................ Operators of Sports and Recreation Facilities: XXXX............... Golf Courses.............. N 7992 Public Golf Courses. ................ *7997 Membership Sports and Recreation Clubs (golf clubs). XXXX............... Skiing Facilities......... N *7999 Amusement and Recreation Services, NEC (skiing facilities). XXXX............... Marinas................... E 4493 Marinas. XXXX............... Recreational, Sports and N 7991 Physical Fitness Facilities. Fitness Centers. ................ *7997 Membership Sports and Recreation Clubs (recreation clubs with facilities). ................ *7999 Amusement and Recreation Services, NEC (nonmembership recreation facilities). XXXX............... Bowling Centers........... E 7933 Bowling Centers. XXX................ Amusement Facilities: XXXX............... Amusement and Theme Parks. E 7996 Amusement Parks. XXXX............... Amusement Arcades and R *7993 Coin-Operated Amusement Devices Other Coin Operated (except slot machine operators). Amusement Devices. XXX................ Gambling Industries: XXXX............... Casinos, except Hotel N *7999 Amusement and Recreation Casinos. Services, NEC (casinos, except hotel casinos). XXXX............... Other Gambling Industries. N *7993 Coin-Operated Amusement Devices (slot machine operators). ................ *7999 Amusement and Recreation Services, NEC (lottery, bingo, bookie, and other gambling operations). XXX................ Other Recreation and Amusement Services: XXXX............... Other Recreation and N *7911 Dance Studios, Schools, and Halls Amusement Services. (except instruction). ................ *7997 Membership Sports and Recreation Clubs (recreation clubs without facilities). ................ *7999 Amusement and Recreation Services, NEC (except circuses, professionals, athletes, caverns and other commercial parks, skiing facilities, casinos and other gambling operations, amusement and recreation facilities, sports instruction, sports equipment rental, and amusement or scenic transport operations). ---------------------------------------------------------------------------------------------------------------- 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 ---------------------------------------------------------------------------------------------------------------- 4493.................................... Marinas......................... Marinas. 5812@................................... Eating Places (Dinner theatres). Theater Companies (pt.). 6512@................................... Operators of Nonresidential Buildings: Stadium and Arena Owners...... Promoters of Arts, Sports and Similar Events with Facilities (pt.). 7389@................................... Business Services, NEC: Agents and Brokers for Authors Agents and Managers for Artists, and Artists. Athletes, and Other Entertainers (pt.). Other......................... (Has been distributed among other service related subsectors). 7819@................................... Services Allied to Motion Picture Production:. Film Directors and Related Independent Artists, Writers, and Motion Picture Production Performers (pt.). Services, Independent. 7911@................................... Dance Studios, Schools and Halls: Ballroom and Dance Hall Other Recreation and Amusement Operations. Services (pt.). Instruction Studios and Fine Arts Schools (pt.) (Included in Schools, Professional Dancing Educational Services subsector). Schools. 7922@................................... Theatrical Producers (Except Motion Picture) and Miscellaneous Theatrical Services: Theater and Opera Companies... Theater Companies (pt.). Theatrical Agents............. Agents and Managers for Artists, Athletes and Other Entertainers (pt.). Ballet and Dance Companies.... Dance Companies. Theater Operators............. Promoters of Arts, Sports, and Similar Events with Facilities (pt.). [[Page 26601]] Theatrical Promoters.......... Promoters of Arts, Sports, and Similar Events without Facilities (pt.). Theatrical Agents............. Agents and Managers for Artists, Athletes, and Other Entertainers (pt.). 7929@................................... Bands, Orchestras, Actors, and Other Entertainers and Entertainment Groups: Musical Groups and Artists, Musical Groups and Artists. Orchestras. Actors and Actresses.......... Independent Artists, Writers, and Performers (pt.). Except Musical Groups and Other Performing Arts Companies Artists, Actors and (pt.). Actresses:. 7933.................................... Bowling Centers................. Bowling Centers. 7941@................................... Professional Sports Clubs and Promoters: Professional Sports Clubs..... Sports Clubs. Sports Agents................. Agents and Managers of Artists, Athletes, and other Entertainers (pt.). Sports Promoters.............. Promoters of Arts, Sports and Similar Events without Facilities (pt.). Stadium Operators............. Promoters of Arts, Sports, and Similar Events with Facilities (pt.). Except Sports Clubs, Stadium Other Spectator Sports (pt.). Operators, Sports Promoters, and Agents. 7948@................................... Racing, Including Track Operations: Racetracks.................... Race Tracks. Racing, except Track Operators Other Spectator Sports (pt.). 7991@................................... Physical Fitness Facilities..... Recreational, Sports and Fitness Centers (pt.). 7992@................................... Public Golf Courses............. Golf Courses (pt.). 7993@................................... Coin Operated Amusement Devices: Except Gambling (Slot Machine) Amusement Arcades and Other Coin Operators. Operated Amusement Devices. Gambling (Slot Machine) Other Gambling Industries (pt.). Operators. 7996.................................... Amusement Parks................. Amusement and Theme Parks. 7997@................................... Membership Sports and Recreation Clubs: Golf Clubs.................... Golf Courses (pt.). Recreation Clubs with Recreational Sports and Fitness Facilities. Centers (pt.). Recreation Clubs Without Other Recreation and Amusement Facilities. Services (pt.). 7999@................................... Amusement and Recreation Services, NEC: Circus Companies............. Other Performing Arts Companies (pt.). Professional Athletes......... Other Spectator Sports (pt.). Skiing Facilities............. Skiing Facilities. Nonmembership Recreation Recreation Sports and Fitness Facilities. Centers (pt.). Casinos, except Hotel Casinos. Casinos, except Hotel Casinos. Lottery, Bingo, Bookie and Other Gambling Industries (pt.). Other Gaming Operations. Caverns and Miscellaneous Nature Parks and Similar Commercial Parks. Institutions (pt.). Sports Instruction............ Athletic Instruction (Included in Educational Services subsector). Sports Equipment Rental....... Rental of Recreation Goods (Included in Rental and Leasing subsector). Scenic Transport Operations, Scenic and Sightseeing Land. Transportation, Land (Included in Scenic and Sightseeing Transportation subsector). Scenic Transport Operations, Scenic and Sightseeing Water. Transportation, Water (Included in Scenic and Sightseeing Transportation subsector. Amusement and Recreation Other Recreation and Amusement Services, NEC (except Services (pt.). circuses, professional athletes, caverns, and other commercial parks, skiing facilities, casinos and other gambling operations, amusement and recreation facilities). 8412.................................... Museums and Art Galleries: Museums...................... Museums. Historical and Heritage Sites. Historical Sites. 8422.................................... Arboreta and Botanical or Zoological Gardens: Botanical and Zoological Botanical and Zoological Gardens. Gardens. Nature Parks and Reserves..... Nature Parks and Similar Institutions (pt.). 8999.................................... Services, Not Elsewhere Classified: Authors, Artists, and Related Independent Artists, Writers, and Technical Services, Performers (pt.). Independent. ---------------------------------------------------------------------------------------------------------------- The abbreviation ``pt.'' means ``part of''. @ means time series break has been created that is greater than 3% of the 1992 revenues for the 1987 SIC industry. The abbreviation NEC is used for Not Elsewhere Classified. [[Page 26602]] Description of Changes to the U.S. System The industries included in the following subsectors were primarily created from the twelve 1987 SICs of Major Group 79, Amusement and Recreation Services. For time series linkage, a time series break greater than three percent of their 1992 revenue is estimated for ten of these industries. 1. Performing Arts, Spectator Sports and Related Industries--There were eleven new industries added to the 1997 industry structure in this subsector to group those activities with the same production process and to improve overall comparability with Mexico and Canada. The underlying focus of this subsector was to group together those entertainment activities that are more visual and non-participatory. The following new industries were created: Theater Companies from part of 1987 SIC 5812, Eating Places, and part of 1987 SIC 7922, Theatrical Producers (Except Motion Picture) and Miscellaneous Theatrical Services. Dance Companies from part of 1987 SIC 7922, Theatrical Producers (Except Motion Picture) and Miscellaneous Theatrical Services. Musical Groups and Artists from part of 1987 SIC 7929 Bands, Orchestras, Actors, and Other Entertainers and Entertainment Groups. Other Performing Arts Companies from part of 1987 SIC 7929, Bands, Orchestras, Actors, and Other Entertainers and Entertainment Groups, and part of 1987 SIC 7999, Amusement and Recreation Services, NEC. Sports Clubs from part of 1987 SIC 7941, Professional Sports Clubs and Promoters. Race Tracks from part of 1987 SIC 7948, Racing, Including Track Operation. Other Spectator Sports from part of 1987 SIC 7941, Professional Sports Clubs and Promoters; part of 1987 SIC 7948, Racing, Including Track Operation; and part of 1987 SIC 7999, Amusement and Recreation Services, NEC. Promoters of Arts, Sports and Similar Events With Facilities from part of 1987 SIC 6512, Operators of Nonresidential Buildings; part of 1987 SIC 7922, Theatrical Producers (Except Motion Picture) and Miscellaneous Theatrical Services; and part of 1987 SIC 7941, Professional Sports Clubs and Promoters. Promoters of Arts, Sports and Similar Events without Facilities from part of 1987 SIC 7922, Theatrical Producers (Except Motion Picture) and Miscellaneous Theatrical Services, and part of 1987 SIC 7941, Professional Sports Clubs and Promoters. Agents and Managers for Artists, Athletes and Other Entertainers from part of 1987 SIC 7389, Business Services, NEC; part of 1987 SIC 7922, Theatrical Producers (Except Motion Picture) and Miscellaneous Theatrical Services; and part of 1987 SIC 7941, Professional Sports Clubs and Promoters. Independent Artists, Writers, and Performers from part of 1987 SIC 7819, Services Allied to Motion Picture Production; part of 1987 SIC 7929, Bands, Orchestras, Actors, and other Entertainers and Entertainment Groups; and part of 1987 SIC 8999, Services, NEC. 2. Museums, Historic Sites and Similar Institutions--The NAICS industries within this subsector were essentially created from the two industries of 1987 Major Group 84, Museums, Art Galleries, and Botanical, and Zoological Gardens. Two new industries were added for this 1997 industry subsector and two industries reflect content changes from their 1987 definitions. These changes were made to better represent the production process differences among these activities. The following industries were added for 1997: Historical Sites from part of 1987 SIC 8412, Museums and Art Galleries. Nature Parks and Similar Institutions from part of SIC 7999, Amusement and Recreation Services, NEC; and part of 1987 SIC 8422, Arboreta and Botanical or Zoological Gardens. The following two industries represent content changes from 1987: Museums from part of 1987 SIC 8412, Museums and Art Galleries. Botanical and Zoological Gardens from part of 1987 SIC 8422, Arboreta and Botanical Gardens. 3. Recreation, Amusement and Gambling Industries--This subsector consists of 10 industries. Six new industries were added to the 1997 structure for this subsector, one industry represents a 1987 industry with content changes, and three industries from 1987 were included without any changes. The NAICS industries within this subsector represent an effort to group those activities with the same production process and to improve comparability with Mexico and Canada. The basis for developing this subsector was to group together entertainment activities that are participatory in nature and to eliminate industry distinctions based on membership. The following new industries were created: Golf Courses from 1987 SIC 7992, Public Golf Courses, and part of 1987 SIC 7997, Membership Sports and Recreation Clubs. Skiing Facilities from part of 1987 SIC 7999, Amusement and Recreation Services, NEC. Recreational, Sports and Fitness Centers from 1987 SIC 7991, Physical Fitness Facilities; part of 1987 SIC 7997, Membership Sports and Recreation Clubs; and part of 1987 SIC 7999, Amusement and Recreation Services, NEC. Casinos, Except Hotel Casinos from part of 1987 SIC 7999, Amusement and Recreation Services, NEC. Other Gambling Industries from part of 1987 SIC 7993, Coin-Operated Amusement Devices, and part of 1987 SIC 7999, Amusement and Recreation Services, NEC. Other Recreation and Amusement Services from part of 1987 SIC 7911, Dance Studios, Schools, and Halls; part of 1987 SIC 7997, Membership Sports and Recreation Clubs; and part of 1987 SIC 7999, Amusement and Recreation Services, NEC. The following industry represents a change in content from 1987: Amusement Arcades and Other Coin-Operated Amusement Devices from part of 1987 SIC 7993, Coin-Operated Amusement Devices. Part VIII--Proposed New Industry Structure for Information Section A--NAICS Structure North American Industry Classification System (NAICS) Agreement Number 18 This Document represents the proposed agreement for the North American Industry Classification System (NAICS) on the boundaries of the following sector and the 4-digit industries of which it is composed: Information, to be described as: Information and Cultural Industries in Canada Informacion en Medios Masivos in Mexico Information in the United States It also displays an aggregation structure that is accepted by all three countries, along with a brief description of the structure and its details (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 [[Page 26603]] 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 Publishing XXX Newspaper, Periodical, Book, and Data Base Publishing XXXX Newspaper Publishing XXXX Periodical Publishing XXXX Book Publishing XXXX Database Publishing XXXX Other Publishing XXX Software Publishing XXXX Software Publishing XX Motion Picture and Sound Recording XXX Motion Picture and Video Industries XXXX Motion Picture and Video Production XXXX Motion Picture and Video Distribution XXXX Teleproduction and Other Post-Production Services XXXX Motion Picture and Video Exhibition XXXX Other Motion Picture and Video Industries XXX Sound Recording Industries XXXX Record Production Companies XXXX Integrated Record Companies XXXX Music Publishing XXXX Sound Recording Studios XXXX Other Sound Recording Industries XX Broadcasting and Telecommunications XXX Radio and Television Broadcasting XXXX Radio Broadcasting XXXX Television Broadcasting XXX Cable Networks and Program Distribution XXXX Cable Networks XXXX Cable and Program Distribution XXX Telecommunications XXXX Wired Telecommunications Carriers XXXX Wireless Telecommunications Carriers, Except Satellite XXXX Telecommunications Resellers XXXX Satellite Telecommunications XXXX Other Telecommunications XX Information Services and Data and Transaction Processing XXX Information Services XXXX News Syndicates XXXX Libraries and Archives XXXX Other Information Services XXX Data and Transaction Processing XXXX Data and Transaction Processing Attachment 2--North American Industry Classification System Draft Classification For: Information and Cultural Industries in Canada Information en Medios Masivos in Mexico Information in the United States Representatives of the statistical agencies of Canada, Mexico, and the United States agree to a draft industry classification for these industries. The draft classification includes four subsectors, Publishing; Motion Picture and Sound Recording; Broadcasting and Telecommunications; and Information Services and Data and Transaction Processing Services. These are further subdivided into 9 industry groups and 29 industries. A General Outline The expressions ``information age'' and ``global information economy'' are used with considerable frequency today. The general idea of an ``information economy'' includes both the notion of industries primarily producing, processing, and distributing information, as well as the idea that every industry is using available information and information technology to reorganize and make themselves more productive. For the purpose of developing NAICS, it is the transformation of information into a commodity that is produced, manipulated and distributed by a number of growing industries that is at issue. The proposed Information sector groups three types of establishments: those engaged in producing, manipulating and distributing information and cultural products; those that provide the means to transmit or distribute these products as well as data or communications; and those that process data or transactions. (Cultural products are those that directly express attitudes, opinions, ideas, values, and artistic creativity; provide entertainment; or offer information and analysis concerning the past and present. Included in this definition are popular, mass-produced, products as well as cultural products that normally have a more limited audience, such as poetry books, literary magazines or classical records.) These activities are currently classified throughout the existing national classifications; traditional publishing is in manufacturing, broadcasting in communications, software production in business services, film production in amusement services, etc. The unique characteristics of information and cultural products, and of the processes involved in their production and distribution, justify the creation of an Information sector, distinct from the goods- producing and service-producing sectors. Some of these characteristics are: 1. Unlike traditional goods, an ``information or cultural product'' such as a newspaper or television program does not necessarily have tangible qualities, nor is it necessarily associated with a particular form. A movie can be shown at a movie theater, on a television broadcast, through video on demand or rented at a local video store. A sound recording can be aired on radio, embedded in multi-media products or sold at a record store. 2. Unlike traditional services, the delivery of these products does not require direct contact between the supplier and the consumer. 3. The value of these products to the consumer does not lie in their tangible qualities but in their information, educational, cultural or entertainment content. 4. Unlike goods or services, information and cultural products can be copied easily. The law has long recognized this; copyright law protects the intangible property of intellectual creations such as books and sound recordings. Copyright applies to all original literary, dramatic, musical, and artistic works, including databases and computer programs. 5. The intangible property aspect of information and cultural products makes the processes involved in their production and distribution very different from goods and services. Only those possessing the rights to these works are authorized to reproduce, alter, improve and distribute them. Acquiring and using these rights often involves significant costs. In addition, technology is revolutionizing the distribution of these products. It is possible to distribute them in a physical form, via broadcast or on line. 6. Distributors of information and cultural products can easily add value to the products they distribute. For instance, broadcasters add advertising not contained in the original product. This capacity means that unlike traditional distributors, they derive revenue not from sale of the distributed product to the final consumer, but from those who pay for the privilege of adding information to the original product. Similarly, a CD-ROM publisher can acquire the rights to thousands of previously published newspaper and periodical articles and add new value by providing search and software and organizing the information in a way that facilitates research and retrieval. These products often command a much higher price than the original information. [[Page 26604]] The distribution modes for information commodities may either eliminate the necessity for traditional manufacture, or reverse the conventional order of manufacture-distribute: A newspaper distributed on line, for example, can be printed locally or by the final consumer. Similarly, it is anticipated that packaged software, which today is mainly bought through the traditional retail channels, will soon be available mainly on line. The NAICS Information sector is designed to make such economic changes transparent as they occur, or to facilitate designing surveys that will monitor the new phenomena and provide data to analyze the changes. Other classification systems tend to obscure economic changes of this kind. Many of the industries in the NAICS information sector are engaged in producing and manipulating products protected by copyright law, or in distributing them (other than distribution by traditional wholesale and retail methods). Examples are traditional publishing industries, software and database publishing industries and film and sound industries. Broadcasting and telecommunication industries, and information providers and processors, are also included in the information sector, because their technologies are so closely linked to other industries in the information sector. Although many new industries have been created for this sector, most of the activities it contains have existed for some time and are distributed throughout the existing classifications. The following paragraphs provide a brief description of the individual components of this sector. The Publishing subsector groups establishments engaged in the publishing of newspapers, periodicals, and books, as well as database and software publishing. In general, publishers issue copies of works for which they possess copyright for sale to the general public, in one or more formats including traditional print form, CD-ROM or on line. Publishers may publish works originally created by others for which they have obtained the rights, and/or works that they have created in- house. In most other classification systems, publishing is treated as a subsidiary activity to a manufacturing activity--book and newspaper publishing, for example, are depicted as subsidiary activities to printing, and placed with printing in the classification. In NAICS, publishing--the reporting, writing, editing, and other processes that are required to create an edition of a newspaper, for example--is treated as a major economic activity in its own right, and classified in the Information sector, whereas printing remains in the NAICS Manufacturing sector. In part, the NAICS classification reflects the fact that publishing increasingly takes place in establishments that are physically separate from the associated printing establishments. More crucially, the NAICS classification of book and newspaper publishing is intended to portray their roles in a modern economy, in which they do not resemble manufacturing activities. Software publishing is included here because the activity--creation of a copyrighted product and bringing it to market--is equivalent to the creation process for other types of intellectual products. Reproduction of pre-packaged software is treated in NAICS as a manufacturing activity; on-line distribution of software products is in the Information sector, and custom design of software to client specifications remains in business services. These distinctions arise because of the different ways that software is created, reproduced, and distributed. The Motion Picture and Sound Recording subsector groups establishments involved in the production and distribution of motion pictures and sound recordings (those involved exclusively in the wholesaling of sound recordings are classified in Wholesale Trade). While motion picture and sound recordings are also ``published,'' the processes involved are sufficiently different from those traditional publishing industries to warrant placing them in the Motion Picture and Sound Recording subsector. The production and distribution of these products involves a complex process and several distinct industries. The Motion Picture and Video Industries industry group includes separate industries for Motion Picture and Video Production, Motion Picture and Video Distribution, Teleproduction and Other Post- Production Services, Motion Picture and Video Exhibition, and Other Motion Picture and Video Industries. The distribution industry includes establishments primarily engaged in acquiring the distribution rights (major input) for films and programs, and charging such clients as movie theaters and broadcasters to show them; those engaged in wholesaling videos to retail stores and rental outlets are classified in Wholesale Trade. The Sound Recording Industries industry group contains new classes for Record Production Companies, Integrated Record Companies, Music Publishing, Sound Recording Studios, and Other Sound Recording Industries. Record production companies are primarily engaged in searching out, identifying and contracting artists for which they arrange and finance the production of master tapes for which they hold the reproduction rights. Establishments in this industry do not own duplication facilities or have distribution capabilities, so they commercialize these rights through leasing/licensing agreements with third parties. Integrated record production companies (major record labels) integrate the production, manufacturing and/or distribution functions, commercializing reproduction rights through these vertically integrated operations. While establishments engaged in record production derive most of their revenues from leasing/licensing the reproduction rights of master recordings and from mechanical royalties, integrated record companies derive most of their revenues from the exploitation of their rights to distribute duplicate sound recordings. The industrial structure proposed for this area is a major revision of existing classifications; the purpose of this restructuring is to reflect the actual activity structure of the sound recording industry, which is not well articulated in current classifications. The structure of the Broadcasting and Telecommunications subsector was decided upon in a previously signed preliminary agreement (Number 2), but at the time, the sector in which it would be included had not been determined. The three countries have agreed to place it in the Information sector. The following is a summary of the previously signed agreement. The Broadcasting and Telecommunications subsector includes establishments providing point-to-point communications and the services related to that activity. The industry groups (Radio and Television Broadcasting, Cable Networks and Program Distribution, and Telecommunications) are based on differences in the methods of communication and in the nature of services provided. The Radio and Television Broadcasting industry group includes establishments that operate broadcasting studios and facilities for over the air or satellite delivery of radio and television programs of entertainment, news, talk, and the like. These establishments are often engaged in the production and purchase of programs and generating revenues from the sale of air time to advertisers, and from donations, subsidies, and/or the sale of programs. The Cable Network [[Page 26605]] and Program Distribution industry group includes two types of establishments. Cable Networks establishments operate studios and facilities for the broadcasting of programs that are typically narrow cast in nature (limited format such as news, sports, education, and youth-oriented programming). The services of these establishments are typically sold on a subscription or fee basis. Delivery of the programs to customers is handled by other establishments, in the Cable and Program Distribution industry, that operate cable systems, direct-to- home satellite systems, or other similar systems. The Telecommunications industry group is primarily engaged in operating, maintaining, and/or providing access to facilities for the transmission of voice, data, text, sound, and full motion picture video between network termination points. A transmission facility may be based on a single technology or a combination of technologies. The Information Services and Data and Transaction Processing subsector is subdivided into two industry groups. The Information Services industry group includes establishments that provide, store, or provide access to information. The Data and Transaction Processing industry group includes establishments that process data and transactions. Limitations and Constraints of the Classification The concept of an Information sector is new and for that reason its definition could be very broad or very narrow. For instance, it can be argued that establishments engaged in activities such as advertising, marketing research, public opinion polling and credit reporting should be included here since they are, in one way or another, engaged in producing, manipulating and distributing information and/or cultural products. These establishments, however, also share characteristics with establishments found in the Professional, Scientific and Technical Services subsector and it is proposed to classify them in that sector. Similarly, independent artists, writers, and performers could be classified here since they provide the creative input essential to the production of many of the industries found in this sector. However, it has been decided to classify all such establishments in a single industry in the Performing Arts, Spectator Sports, and Related Industries subsector. The Information sector is largely a restructuring of existing classifications. For example, many of the activities that are classified in Publishing and in Sound Recording Industries are currently classified in the Manufacturing sectors in the existing national classifications. As a result, the definition of existing broad aggregates such as manufacturing or business services have changed. The identification of new and emerging industries is one of the principle goals of the NAICS project, and in this case many such industries are introduced in the classification (the extent varies by country.) However, many users have expressed the wish that this goal be achieved while minimizing breaks in time series. These two objectives are often conflicting and the degree to which proposed NAICS industries relate to existing national classification systems varies from country to country. This issue is elaborated in the Changes to the National Classification section. Relationship to ISIC Twenty-six of the 29 proposed NAICS industries are contained within Divisions 22, Publishing, Printing and Reproduction of Recorded Media; 64, Post and Telecommunications; 72, Computer and Related Activities; and 92, Recreational, Cultural and Sporting Activities of the Current International Standard Industrial Classification of all Economic Activities (ISIC, Revision 3) of the United Nations. The following NAICS industries cannot be assigned to an ISIC division without being subdivided: Other Publishing; Radio Broadcasting; and Television Broadcasting. However, the discrepancies between these proposed NAICS industries and ISIC are minor and do not have a significant impact on the comparability of data. Accordingly, most of the NAICS Information sector can be retabulated to reach consistency at the two-digit level of ISIC. Changes to the National Classification For Canada, the most fundamental change to the 1980 Canadian Standard Industrial Classification (CSIC) is the grouping in one sector of industries currently classified in several sectors. Publishing has been moved from Manufacturing (CSIC 28), broadcasting and telecommunication industries from Communication Industries (CSIC 48), film industries from Amusement and Recreational Service Industries (CSIC 96), record companies from Manufacturing (CSIC 39), libraries from Educational Services Industries (CSIC 85), and software publishing and data processing from Business Service Industries (CSIC 77). The current classification for traditional publishing separates establishments engaged in publishing only from those engaged in publishing and printing. In the proposed NAICS classification, these establishments are classified to five different 4-digit industries according to the type of publishing (newspaper, book, database, etc.) whether or not they are also engaged in printing activities. Software publishing, currently a component of the Computer Services industry (CSIC 7721), is now classified in this subsector. The classification of video wholesaling to the existing Motion Picture and Video Distribution class (CSIC 9612) is changed; video wholesaling is now assigned to the Wholesale Trade area. Establishments primarily engaged in videotaping are moving from the Motion Picture and Video Production industry (CSIC 9611) to the NAICS class for Photography in the Management, Employment, Administrative and Support Services subsector. The three existing classes for motion picture and video exhibition (CSIC 9621, 9622, 9629) are collapsed into one NAICS class. Independent motion picture directors, currently classified to the Motion Picture and Video Production industry, are moving to the Performing Arts, Spectator Sports and Related Industries subsector of NAICS. Sound recording activities are now classified to a separate industry group in five newly created 4-digit industries. This is significantly different from the current practice of assigning these activities in different areas of the CSIC, the most important being wholesale trade and manufacturing. Other significant changes include the movement of libraries (part of CSIC 8541) and archives (part of CSIC 8551) from Educational Service Industries to this sector and of news syndicates (part of CSIC 7799), on-line information services (part of CSIC 7799) and data processing services (part of CSIC 7721) from the Business Services division to this sector. For Mexico, economic activities emanating from various CMAP sectors have been reclassified into the new Information sector. Editing and a combination of editing and printing were taken from the Manufacturing Sector, group CMAP 3420, corresponding to printing and editing. From group CMAP 3832, Manufacture and/or Assembly of Electronic Radio, Television, Communications and Medical Equipment, recording, editing and record reproducing studios were [[Page 26606]] transferred when these studios are integrated in this manner. The following classes were reclassified from the current Transportation and Communications Sector; CMAP classes 720003, Telephone Services; 720004, Public Telephone Services; 720005, Telegraph Services; and 720006, Other Telecommunications Services, except for facsimile services in the latter category, found under the Organization Services subsector, together with Business Centers. Services related to cinematography, radio and television were taken from the current Recreation, Cultural and Sports Services (CMAP classes 941101, 941102, 941103, 941104, 941105, 941201, 941202 and 941203), both from the public and private sectors. Library services, currently classified by the CMAP together with museums, botanical gardens and the like, under CMAP branches 9421 and 9422, were also reclassified under this new sector. Finally, from the current CMAP 9510 branch, Provision of Professional, Technical and Specialized Services, the following CMAP classes were taken: from CMAP 951004, Systems Analysis and Information Processing Services, the corresponding parts to software editing services, on-line consulting services and rented computer time; CMAP 951014, News Agencies' Services; and CMAP 951023, Other Professional, Technical and Specialized Services previously mentioned, pre-recorded telephone information services. For the United States, the Information sector is a new grouping and includes industries that were included in different divisions of the 1987 SIC. The concepts underlying the creation of this sector and the industry descriptions address the increasing use of electronic means of dissemination that is not considered in the 1987 SIC. The Newspaper, Periodical, Book and Database Publishing industry group is currently included in the Manufacturing division of the 1987 SIC (Industry Groups 271, 272, 273, 274 and part of 1987 SIC 2771). The industries included in the NAICS Information sector are those involved in publishing, or publishing and printing combined. Establishments engaged in printing only remain in the Manufacturing sector of NAICS. The Software Publishing industry is part of the 1987 SIC 7372, Prepackaged Software, in the 1987 SIC in the Business Services major group. The reproduction of prepackaged software only is included in the Computer and Electronic Components subsector in the NAICS Manufacturing sector. The Motion Picture and Video Industries industry group includes industries classified in the Motion Pictures major group of the 1987 SIC. Parts of 1987 SIC 7819, Services Allied Motion Pictures, were reclassified in other sectors to create more homogeneous, production based categories. A new industry is created for Teleproduction and Other Post-production Services from 1987 SIC 7819, Services Allied to Motion Picture Production, and the remainder of 1987 SIC 7819 was combined with 1987 SIC 7829, Services Allied to Motion Picture Distribution. Five new industries are created within the Sound Recording Industries industry group. None of these industries exist in the 1987 SIC and, in most instances, there is no indication in the 1987 SIC Manual of the appropriate industry in which they should be included. Because of this, it is difficult to predict the impact of this change, though in most instances it is expected to have a minor effect on existing time series. Changes to the U.S. SIC system for the Broadcasting and Telecommunications industries subsector were addressed in a previous NAICS agreement (Agreement number 2). The Information Services and Data and Transaction Processing subsector includes a number of information service-related industries. The News Syndicates and Libraries and Archives industries correspond to 1987 SIC 7383, News Syndicates, and 8231, Libraries. News Syndicates were previously located in the Business Services major group and Libraries were located in the Educational Services major group. The Other Information Services industry primarily includes establishments classified in 1987 SIC 7375, Information Retrieval Services. U.S. national detail preserves this industry and provides a residual class for all other information services. The Data and Transaction Processing industry corresponds to 1987 SIC 7374, Computer Processing and Data Preparation and Processing Services. Both Information Retrieval Services and Computer Processing and Data Preparation and Processing Services were located in the Business Services major group. Achievement of Objectives The classification meets the objectives for the North American Industry Classification System. It is comprised of industries that group establishments with similar production processes, that is, it applies the production-oriented economic concept. The hierarchical structure also follows the production concept. The classification achieves comparability for the three participating countries. All countries agree on the definitions of the industries. The classification improves comparability with other countries. Based on existing data, each country expects to be able to publish data regularly, or in the near future, at the 4-digit NAICS level of this structure. Other objectives of the NAICS project have also been met. The classification meets the objectives of an industry classification. In an effort to identify high technology and new emerging industries, new industries in the Sound Recording industry group and the Broadcasting and Telecommunications subsector have been identified. The classifications are homogeneous and account for most of the activities that define them. In addition, they are economically significant. 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 sector presented in Part VIII, 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 sector covered in Part VIII 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. [[Page 26607]] Table 1 ---------------------------------------------------------------------------------------------------------------- 1987 1997 NAICS and U.S. Status code SIC 1987 SIC description description code ---------------------------------------------------------------------------------------------------------------- XX................. Publishing XXX................ Newspaper, Periodical, Book and Database Publishing: XXXX............... Newspaper Publishing...... E 2711 Newspapers: Publishing, or Publishing and Printing. XXXX............... Periodical Publishing..... E 2721 Periodicals: Publishing, or Publishing and Printing. XXXX............... Book Publishing........... E 2731 Books: Publishing, or Publishing and Printing. XXXX............... Database Publishing....... N *2741 Miscellaneous Publishing (database publishers). XXXX............... Other Publishing: XXXXX.............. Greeting Card Publishing. R *2771 Greeting Cards. XXXXX.............. All Other Publishing..... R *2741 Miscellaneous Publishing (except database publishing). XXX................ Software Publishing: XXXX............... Software Publishing....... R *7372 Prepackaged Software. XX................. Motion Picture and Sound Recording: XXX................ Motion Picture and Video Industries: XXXX............... Motion Picture and Video E 7812 Motion Picture and Video Tape Production. Production. XXXX............... Motion Picture and Video E *7822 Motion Picture and Video Tape Distribution. Distribution (except video tape and cassette wholesalers). XXXX............... Teleproduction and Other N *7819 Services Allied to Motion Picture Post-Production Services. Production (teleproduction and post-production services). XXXX............... Motion Picture and Video Exhibition: XXXXX.............. Motion Picture Theaters, E 7832 Motion Picture Theaters, Except except Drive-Ins. Drive-In. XXXXX.............. Drive-In Motion Picture E 7833 Drive-In Motion Picture Theaters. Theaters. XXXX............... Other Motion Picture and N *7819 Services Allied to Motion Picture Video Industries. Production (except casting bureaus, wardrobe and equipment rental, talent payment services, teleproduction and other post- production services). 7829 Services Allied to Motion Picture Distribution. XXX................ Sound Recording Industries: XXXX............... Record Production N *6794 Patent Owners and Lessors (music Companies. royalties, sheet and record). XXXX............... Integrated Record N *3652 Phonograph Records and Companies. Prerecorded Audio Tapes and Disks (integrated record companies, except duplication only). XXXX............... Music Publishing.......... N *6794 Patent Owners and Lessors (music publishing). XXXX............... Sound Recording Studios... N *7389 Business Services, NEC (recording studios). XXXX............... Other Sound Recording N *7389 Business Services, NEC (audio Industries. taping services). *7922 Theatrical Producers (Except Motion Picture) and Miscellaneous Theatrical Services (producers of radio programs). XX................. Broadcasting and Telecommunications: XXX................ Radio and Television Broadcasting: XXXX............... Radio Broadcasting: XXXXX.............. Radio Networks........... N *4832 Radio Broadcasting Stations (networks). XXXXX.............. Radio Stations........... N *4832 Radio Broadcasting Stations (except networks). XXXX............... Television Broadcasting... E 4833 Television Broadcasting Stations. XXX................ Cable Networks and Program Distribution: XXXX............... Cable Networks............ N *4841 Cable and Other Pay Television Services (cable networks). XXXX............... Cable and Program N *4841 Cable and Other Pay Television Distribution. Services (except cable networks). XXX................ Telecommunications: XXXX............... Wired Telecommunications N *4813 Telephone Communications, Except Carriers. Radiotelephone (except resellers). 4822 Telegraph and Other Message Communications. XXXX............... Wireless Telecommunications Carriers, Except Satellite: XXXXX.............. Paging................... N *4812 Radiotelephone Communications (paging carriers). XXXXX.............. Cellular and Other N *4812 Radiotelephone Communications Wireless (cellular carriers). Telecommunications. *4899 Communications Services, NEC (radio dispatch). XXXX............... Telecommunications N *4812 Radiotelephone Communications Resellers. (paging and cellular resellers). *4813 Telephone Communications, Except Radiotelephone (resellers). XXXX............... Satellite N *4899 Communications Services, NEC Telecommunications. (Satellite communications). XXXX............... Other Telecommunications.. N *4899 Communications Services, NEC (except radio dispatch, satellite communications). XX................. Information Services and Data and Transaction Processing: XXX................ Information Services: XXXX............... News Syndicates........... E 7383 News Syndicates. XXXX............... Libraries and Archives.... E 8231 Libraries. XXXX............... Other Information Services: XXXXX.............. On-Line Information E 7375 Information Retrieval Services. Services. [[Page 26608]] XXXXX.............. All Other Information N *8999 Services, NEC (miscellaneous Services. information providers). XXX................ Data and Transaction Processing: XXXX............... Data and Transaction E 7374 Computer Processing and Data Processing. Preparation and Processing 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 ---------------------------------------------------------------------------------------------------------------- 2711.................................... Newspapers: Publishing, or Newspaper Publishing. Publishing and Printing. 2721.................................... Periodicals: Publishing, or Periodical Publishing. Publishing and Printing. 2731.................................... Books: Publishing, or Publishing Book Publishing. and Printing. 2741@................................... Miscellaneous Publishing: .................................... Database Publishing........... Database Publishing. Miscellaneous Publishing, All Other Publishing. Except Database. 2771.................................... Greeting Cards.................. Greeting Card Publishing. 4812@................................... Radiotelephone Communications: Paging Carriers............... Paging. Cellular Carriers............. Cellular and Other Wireless Telecommunications Paging and Cellular Resellers... Telecommunications Resellers (pt.). 4813@................................... Telephone Communications, Except Radiotelephone: Except Resellers.............. Wired Telecommunications Carriers (pt.). Resellers..................... Telecommunications Resellers (pt.). 4822@................................... Telegraph and Other Message Wired Telecommunications Carriers Communications. (pt.). 4832.................................... Radio Broadcasting Stations: Networks...................... Radio Networks. Stations...................... Radio Stations. 4833.................................... Television Broadcasting Stations Television Broadcasting. 4841.................................... Cable and Other Pay Television Services: Cable Networks................ Cable Networks. Except Cable Networks......... Cable and Program Distribution. 4899.................................... Communications Services, Not Elsewhere Classified: Radio Dispatch................ Cellular and Other Wireless Telecommunications (pt.). Satellite Communications...... Satellite Telecommunications. Except Radio Dispatch and Other Telecommunications. Satellite. Communications 7372.................................... Prepackaged Software: Software Publishing........... Software Publishing. Reproduction of Software...... Reproduction of Software. 7374.................................... Computer Processing and Data Data and Transaction Processing. Preparation and Processing Services. 7375.................................... Information Retrieval Services.. On-Line Information Services. 7383.................................... News Syndicates................. New Syndicates. 7389.................................... Business Services, Not Elsewhere Classified: Sound Recording Studios....... Sound Recording Studios. Audio Taping Services......... Other Sound Recording Industries (pt.). 7812.................................... Motion Picture and Video Tape Motion Picture and Video Production. Production. 7819.................................... Services Allied to Motion Picture Production: Teleproduction and Post- Teleproduction and Other Post- Production Services. Production Services. Casting Bureaus............... Employment Agencies (pt.) (Included in Management, Employment, Administrative and Support Services subsector). Wardrobe Rental (Motion Rental and Leasing of Formal Wear Pictures). and Costumes (pt.) (Included in Rental and Leasing subsector). Rental of Motion Picture Rental and Leasing of Machinery and Equipment. Equipment (pt.) (Included in Rental and Leasing subsector). Talent Payment Services....... Payroll Services (Included in Professional Scientific and Technical Services subsector). Except Casting Bureaus, Other Motion Picture and Video Wardrobe and Equipment Services (pt.). Rental, Teleproduction and Other Post-Production Services. 7822.................................... Motion Picture and Video Tape Distribution: Distribution, Except Video Motion Picture and Video Tape and Cassette Wholesalers. Distribution. Video Tape and Cassette (Included in Wholesale Trade Wholesalers. Sector). 7829.................................... Services Allied to Motion Other Motion Picture and Video Picture Distribution. Services (pt.). [[Page 26609]] 7832.................................... Motion Picture Theaters, Except Motion Picture Theaters, Except Drive-Ins. Drive-In. 7833.................................... Drive-In Motion Picture Theaters Drive-In Motion Picture Theaters. 7922@................................... Theatrical Producers (Except Motion Picture) and Miscellaneous Theatrical Services: Producers of Radio Programs:.. Other Sound Recording Industries (pt.). 8231.................................... Libraries....................... Libraries and Archives. 6794@................................... Patent Owners and Lessors: Record Production Companies... Record Production Companies. Music Publishing.............. Music Publishing. 3652@................................... Phonograph Records and Prerecorded Audio Tapes and Disk. Integrated Record Companies, Integrated Record Companies. Except Duplication Only. 8999@................................... Services, Not Elsewhere Classified. Miscellaneous Information All Other Information Services. Providers. ---------------------------------------------------------------------------------------------------------------- The abbreviation ``pt.'' means ``part of''. @ means time series break has been created that is greater than 3% of the 1992 revenues for the 1987 SIC industry. The abbreviation NEC is used for Not Elsewhere Classified. Note: Detail for SIC's 7389, 7922, 6794, 3652 and 8999 only represent those parts applicable to the Information Sector. Description of Changes to the U.S. System 1. One new industry was created in the Publishing subsector. Database Publishing was created from part of 1987 SIC 2741, Miscellaneous Publishing. It was established because of the growth of this type of publishing and is supported by the production process. All Other Publishing was revised from part of 1987 SIC 2741, Miscellaneous Publishing, by the removal of database publishing. Software Publishing was created from part of 1987 SIC 7372 Prepackaged Software. Reproduction of software only is included in the Computer and Electronic Component Manufacturing subsector. Four of the five 1987 publishing industries remained largely unchanged and time series will not be significantly affected. 2. Seven new industries were created in the Motion Picture and Sound Recording subsector. The Teleproduction and Other Post-Production Services industry was created from part of 1987 SIC 7819, Services Allied to Motion Picture Production, based upon a request by the industry and is supported by production based principles. Other Motion Picture and Video Industries was created from part of 1987 SIC 7819, Services Allied to Motion Picture Production, and 1987 SIC 7829, Services Allied to Motion Picture Distribution, to form a residual industry containing establishments that provide specialized services in support of the motion picture production and distribution industries. The Record Production Companies industry was created from part of 1987 SIC 6794, Patent Owners and Lessors. This industry was created to include establishments that perform a specialized role in searching out and contracting musical artists. This industry is supported by the production process. The Integrated Record Companies industry was created from part of 1987 SIC 3652, Phonograph Records and Prerecorded Audio Tapes and Disks. This industry was established to include establishments that reproduce and distribute musical recordings. This industry is supported by the production process. The Music Publishing industry was created from part of 1987 SIC 6794, Patent Owners and Lessors, to recognize the specialized role it has in promoting the use of musical works in recordings, film, television, and other media. Music publishers are primarily engaged in owning the copyright of musical compositions, and administering the exploitation of the bundle of rights that flow from the ownership of this copyright. The industry is supported by production based principles. The Sound Recording Studios industry was created from part of 1987 SIC 7389, Business Services, Not Elsewhere Classified. This industry was established to include establishments that perform a specialized role in providing facilities and expertise in recording performances, and is supported by production based principles. Other Sound Recording Services was created from part of 1987 SIC 7922, Theatrical Producers (Except Motion Picture) and Miscellaneous Theatrical Services, and part of 1987 SIC 7389, Business Services, NEC. This industry was created as a residual to include establishments that provide specialized audio and sound related services. It is supported by production based principles. 3. There are 11 new industries in the Broadcasting and Telecommunications subsector. These were published in the Federal Register on July 26, 1995. Please refer to page 38448 for details. 4. There is one new industry in the Information Services and Data and Transaction Processing subsector. The All Other Information Services industry was created to include a variety of information service related establishments not included in other industries in this sector. While this class is expected to be very small at the present time, it represents a residual industry that may contain new types of establishments in the future as more advanced information technologies emerge and grow. The U.S. national On-Line Information Services industry (1987 SIC 7375, Information Retrieval Services) includes establishments that provide access to, and distribution of, information that has been stored electronically for retrieval. Part IX--Proposed New Industry Structure for Wood Product Manufacturing, Except Furniture Section A--NAICS Structure North American Industry Classification System (NAICS) Agreement Number 19 This Document represents the proposed agreement on the structure of the North American Industry Classification System (NAICS) for the following subsector: Wood Product Manufacturing, Except Furniture [[Page 26610]] 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 Wood Product Manufacturing, Except Furniture XXX Sawmill Product and Wood Preservation Manufacturing XXXX Sawmill Product and Wood Preservation Manufacturing XXX Laminated Wood Product Manufacturing XXXX Laminated Wood Product Manufacturing XXX Other Wood Product Manufacturing XXXX Wood Construction Product Manufacturing XXXX Wood Container and Package Product Manufacturing XXXX All Other Wood Product Manufacturing Attachment 2--North American Industry Classification System Draft Classification for: Wood Product Manufacturing, Except Furniture Representatives of the statistical agencies of Canada, Mexico, and the United States agree to a draft industry classification for these industries. The draft classification provides for the subsector Wood Product Manufacturing, Except Furniture. This subsector is further subdivided into three industry groups and five industries. A General Outline The Wood Product Manufacturing, Except Furniture industries produce wood products such as lumber, hardwood and softwood plywood and veneers, wood containers, wood flooring and trusses, mobile homes, and prefabricated wood buildings. The production processes of the Wood Product Manufacturing, Except Furniture industries include sawing, planing, shaping, laminating and sometimes assembly of wood, starting from logs that are cut into bolts, planks, or boards that then may be further cut, or shaped by lathes or other shaping tools. The boards or other shapes also may be subsequently planed or smoothed, and assembled into finished products such as wooden containers. The Sawmill Product and Wood Preservation Manufacturing industries include establishments whose production process begins with wooden logs that are then transformed into boards, poles, ties, and beams. Establishments that process wood to prevent rotting by impregnation with creosote or other chemical compounds also are included in this industry group. The Laminated Wood Product Manufacturing industries include establishments that produce hardwood and softwood plywood, particle board, oriented strand board, and glue laminated wood products, including plywood covered with other materials such as plastic and metals. Plywood and particle board products that are included in this industry group are generally produced by a process involving high- pressure compression and through the use of glues either in combination or separately. There are three NAICS industries in the Other Wood Product Manufacturing industry group. The Wood Construction Product Manufacturing industry includes establishments that manufacture doors, windows, closets, wall coverings, parquet flooring, staves, partitions, and general products for woodwork. Excluded from this industry is the manufacture of wooden houses and furniture. Establishments in the Wood Container and Package Product Manufacturing industries manufacture products for packing and packaging, such as pallets, barrels, casks, crates, vats, containers, jewelry boxes, and decorative and ornamental boxes. Finally, establishments in the All Other Wood Product Manufacturing industries produce cork and cork products, manufactured wooden houses, plaiting materials, such as wicker, reeds, etc., turned items, etc. Limitations and Constraints of the Classification Developing an industry classification for Wood Product Manufacturing, Except Furniture industries was difficult for the three countries. First, the wood industry in Mexico is small and relatively unspecialized. Therefore the NAICS industries are quite aggregated to ensure that information can be published in all three countries. For example, in Mexico the treatment and preservation of wood generally takes place at sawmills as part of the production of poles and ties. There are few establishments where it is the primary activity. Therefore, NAICS combines these activities into one industry. Another factor that limited the formulation of classes in this subsector are differences in climate among the three countries. The climate has led to higher levels of development and specialization in the wood industry in the United States and Canada, particularly with regard to construction and construction materials. Mexico does not grow hardwood trees. Each country may, however, publish additional national industries that comprise subdivisions of NAICS industries to present data for activities that are nationally significant. Relationship to ISIC Most four-digit NAICS industries in this subsector are contained within Division 20, Manufacture of Wood Products, of the current International Standard Industrial Classification of all Economic Activities (ISIC, Revision 3) of the United Nations. The following NAICS industry cannot be assigned to an ISIC Division: All Other Wood Product Manufacturing. This industry includes the manufacture of wooden heels that are classified in ISIC Division 19, Manufacture of Leather, Leather Products, and Footwear. However, this is a very small activity and should not significantly affect the comparability between this NAICS subsector and ISIC Division 20. Changes to the National Classifications The changes to the current national classifications were varied in nature. In some cases, changes applied to all three countries while in others the changes affected only one or two of the countries. For Canada, the major structural change entailed moving the production of building board (CSIC 2714) to the Wood Product Manufacturing, Except Furniture subsector both to achieve international comparability and to better meet the production process principle. CSIC 2542, Kitchen Cabinet and Bathroom Vanities, was moved from the Canadian Wood major group to better adhere to the production process, and ultimately to achieve three country [[Page 26611]] comparability. In addition, sawmills were redefined to exclude wood and wood products made from purchased lumber. Wooden coffins were moved from this subsector to Miscellaneous Manufacturing because establishments tend to make this product from plastic and metal as well as wood. Other structural changes for Canada, such as the movement of the manufacture of wooden cigar cases and jewelry boxes, wooden boot and shoe heels, billboards, and other wooden signs and cork gaskets, etc. are minor. For Mexico, the major change is the movement of wood furniture from CMAP Subsector, Wood and Wood Products, Including Furniture, to the new NAICS Furniture Manufacturing subsector. In the current Mexican structure, the manufacture of furniture is classified in groups allocated to the type of input material, that is, wood, metal, plastic, etc. Furniture is more and more being made of multiple materials and design is an important component of its production process. Thus, a separate NAICS subsector was created for the manufacture of furniture from all types of material. For the United States, the major change is the movement of 1987 SIC 2411, Logging, from the Lumber and Wood Products, Except Furniture major group to the Forestry and Logging subsector. The move was made to better meet production principles, and to match Canada's and Mexico's classification of this activity. Another important structural change was to move the manufacture of 1987 SIC 2434, Wood Kitchen Cabinets, from this group to the NAICS Furniture Manufacturing subsector for production principles. The manufacture of wooden chair frames was also moved from here to the Furniture Manufacturing subsector to reach international comparability. Other structural changes include the movement of cork gaskets, wood heels, wood signs, and burnt wood articles to this group from various other manufacturing subsectors. 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. The industries have high specialization ratios, and they are economically significant. The NAICS industries are large aggregations, but this was necessitated by the considerations discussed above under Limitations and Constraints of the Classification. The classification is suitable for sampling, data-publishing, and other aspects of survey operations. Finally, while disruptions to time series exist, they are not generally significant. The statistical agencies can develop statistical ``links,'' to enable the re-tabulation of time series on the 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 IX, 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 IX 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................. Wood Product Manufacturing, Except Furniture: XXX................ Sawmill Product and Wood Preservation Manufacturing: XXXX............... Sawmill Product and Wood Preservation Manufacturing: XXXXX.............. Sawmills and Planing R 2421 Sawmills and Planing Mills, Mills. General. 2429 Special Product Sawmills, NEC. XXXXX.............. Wood Preserving.......... E 2491 Wood Preserving. XXX................ Laminated Wood Product ................ ................................. Manufacturing: XXXX............... Laminated Wood Product ................ ................................. Manufacturing: XXXXX.............. Hardwood Veneer and E 2435 Hardwood Veneer and Plywood. Plywood Manufacturing. XXXXX.............. Softwood Veneer and E 2436 Softwood Veneer and Plywood. Plywood Manufacturing. XXXXX.............. Structural Wood Member R *2439 Structural Wood Members, NEC Manufacturing, Except (except trusses). Trusses. XXXXX.............. Reconstituted Wood E 2493 Reconstituted Wood Products. Product Manufacturing. XXX................ Other Wood Product ................ ................................. Manufacturing: XXXX............... Wood Construction Product Manufacturing: XXXXX.............. Hardwood Dimension Mills. R *2426 Hardwood Dimension and Flooring Mills (except flooring). XXXXX.............. Wood Window and Door N *2431 Millwork. Manufacturing. XXXXX.............. Other Millwork R *2426 Hardwood Dimension and Flooring Manufacturing, Including Mills (hardwood flooring). Flooring. *2431 Millwork. XXXXX.............. Truss Manufacturing...... N *2439 Structural Wood Members, NEC (trusses). [[Page 26612]] XXXX............... Wood Container and Package Product Manufacturing. XXXXX.............. Wood Container and N 2441 Nailed and Lock Corner Wood Boxes Package Product and Shook. Manufacturing. ................ 2448 Wood Pallets and Skids. 2449 Wood Containers, NEC. *2499 Wood Products, NEC (wood tubs and vats, jewelry and cigar boxes). XXXX............... All Other Wood Product Manufacturing: XXXXX.............. Manufactured Homes E 2451 Mobile Homes. (Mobile) Manufacturing. XXXXX.............. Prefabricated Wood E 2452 Prefabricated Wood Buildings and Building and Component Components. Manufacturing. XXXXX.............. Other Wood Product R *2426 Hardwood Dimension and Flooring Manufacturing. Mills (wood stock and turnings). ................................. *2499 Wood Products, NEC (other wood products). *3053 Gaskets, Packing, and Sealing Devices (cork gaskets, packaging, and sealing devices). *3131 Boot and Shoe Cut Stock and Findings (wood heels). *3993 Signs and Advertising Specialties (wood signs). ---------------------------------------------------------------------------------------------------------------- The definitions of status 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 ---------------------------------------------------------------------------------------------------------------- 2411.................................... Logging......................... Logging Operations (Included in Support Activities for Forestry subsector). 2421@................................... Sawmills and Planing Mills, Sawmills and Planing Mills (pt). General. 2426@................................... Hardwood Dimension and Flooring Mills: Hardwood Flooring............. Millwork Manufacturing, Including Flooring (pt) Wood Stock and Turnings....... Other Wood Product Manufacturing (pt). Office Chair Frames........... Wood Office Furniture Manufacturing (pt) (Included in Furniture Manufacturing subsector). Chair Frames for Wood Household Furniture Nonupholstered Furniture Manufacturing, Except Upholstered (Household). (pt) (Included in Furniture Manufacturing subsector). Chair Frames for Upholstered Upholstered Wood Household Furniture Furniture (Household). Manufacturing (pt) (Included in Furniture Manufacturing subsector). Other Hardwood Dimension Hardwood Dimension Mills. Except Flooring. 2429@................................... Special Product Sawmills NEC.... Sawmills and Planing Mills (pt). 2431@................................... Millwork: Wood Window and Door Other Millwork Manufacturing, Manufacturing. Including Flooring (pt). 2434.................................... Wood Kitchen Cabinets........... Wood Kitchen Cabinet Manufacturing (Included in Furniture Manufacturing subsector). 2435.................................... Hardwood Veneer and Plywood..... Hardwood Veneer and Plywood Manufacturing 2436.................................... Softwood Veneer and Plywood..... Softwood Veneer and Plywood Manufacturing 2439@................................... Structural Wood Members, NEC: Except Trusses................ Structural Wood Member Manufacturing, Except Trusses. Trusses....................... Truss Manufacturing. 2441.................................... Nailed and Lock Corner Wood Wood Containers and Package Product Boxes and Shook. Manufacturing (pt). 2448.................................... Wood Pallets and Skids.......... Wood Containers and Package Product Manufacturing (pt). 2449.................................... Wood Containers, NEC............ Wood Containers and Package Product Manufacturing (pt). 2451.................................... Mobile Homes.................... Manufactured Homes, (Mobile Manufacturing 2452.................................... Prefabricated Wood Buildings and Prefabricated Wood Building and Components. Component Manufacturing. 2491.................................... Wood Preserving................. Wood Preserving. 2493.................................... Reconstituted Wood Products..... Reconstituted Wood Product Manufacturing. 2499.................................... Wood Products, NEC: Wood Tubs and Vats, Jewelry Other Wood Container Manufacturing and Cigar Boxes. (pt). Wood Laundry Hampers.......... Household Wood Furniture Manufacturing, Except Upholstered (pt) (Included in Furniture Manufacturing subsector). Laundry Hampers Made from Other Furniture Manufacturing (pt) Rattan, Reed or Willow Mirror (Included in Furniture and Picture Frames. Manufacturing subsector) All Other Miscellaneous Manufacturing (pt) (To Be Included in Miscellaneous Manufacturing subsector). Other Wood Products........... Other Wood Product Manufacturing (pt). 3053@................................... Gaskets, Packing, and Sealing Devices: Cork Gaskets, Packing, and Other Wood Product Manufacturing Sealing Devices. (pt). [[Page 26613]] Metal Gaskets, Packing, and Other Miscellaneous Fabricated Metal Sealing Devices. Product Manufacturing (pt) (Included in Fabricated Metal Product Manufacturing subsector). Plastics Gaskets, Packing, and All Other Plastic Product Sealing Devices. Manufacturing (pt) (Included in Rubber and Plastic Product Manufacturing subsector). Rubber Gaskets, Packing, and All Other Rubber Product Sealing Devices. Manufacturing (pt) (Included in Rubber and Plastic Product Manufacturing subsector). 3131@................................... Boot and Shoe Cut Stock and Findings: Wood Heels.................... Other Wood Product Manufacturing (pt). Metal Buckles................. Fastener, Button, Needle, and Pin Manufacturing (pt) (To be Included in Miscellaneous Manufacturing subsector). Other Footwear Cut Stock...... Miscellaneous Leather and Allied Product Manufacturing (pt) (Included in Leather and Allied Product Manufacturing subsector). 3993@................................... Signs and Advertising Specialties: Wood Signs.................... Other Wood Product Manufacturing (pt). Electric Signs................ Electric Sign Manufacturing (Included in Electrical Equipment, Appliance, and Component Manufacturing subsector). Metal Signs................... All Other Fabricated Metal Product Manufacturing (pt) (Included in Fabricated Metal Product Manufacturing subsector). Flexographic Printing of Commercial Flexographic Printing Advertising Specialties. (pt) (Included in Printing and Related Support Activities subsector). Gravure Printing of Commercial Gravure Printing (pt) Advertising Specialties. (Included in Printing and Related Support Activities subsector). Lithographic Printing of Commercial Lithographic Printing Advertising Specialties. (pt) (Included in Printing and Related Support Activities subsector). Screen Printing of Advertising Commercial Screen Printing (pt) Specialties. (Included in Printing and Related Support Activities subsector). Other Printing of Advertising Other Commercial Printing (pt) Specialties. (Included in Printing and Related Support Activities subsector). 3999.................................... Manufacturing Industries, NEC: Burnt Wood Articles........... Other Wood Product Manufacturing (pt). Beauty and Barber Chairs...... Metal Office and Public Building Furniture Manufacturing (pt) (Included in Furniture Manufacturing subsector). Fur Bleaching, Currying, Leather and Hide Tanning and Scraping, Tanning and Dyeing. Finishing Manufacturing (pt) (Included in Leather and Allied Product Manufacturing subsector). Lamp Shades of Paper and Other Lighting Equipment Textile. Manufacturing (pt) (Included in Electrical Equipment, Appliance, and Component Manufacturing subsector). Matches....................... Other Miscellaneous Chemical Product Manufacturing (pt) (Included in Chemical Product Manufacturing subsector). Metal Products, Such As Combs, All Other Fabricated Metal Product Hair Curlers, Etc.. Manufacturing (pt) (Included in Fabricated Metal Product Manufacturing subsector). Plastics Products, Such As All Other Plastic Product Combs, Hair Curlers, Etc.. Manufacturing (pt) (Included in Rubber and Plastic Product Manufacturing subsector). Flexographic Printing Eyeglass Commercial Flexographic Printing Frames for the Trade. (pt) (Included in Printing and Related Support Activities subsector). Gravure Printing Eyeglass Commercial Gravure Printing (pt) Frames for the Trade. (Included in Printing and Related Support Activities subsector). Lithographic Printing Eyeglass Commercial Lithographic Printing Frames for the Trade. (pt) (Included in Printing and Related Support Activities subsector). Screen Printing Eyeglass Commercial Screen Printing (pt) Frames for the Trade. (Included in Printing and Related Support Activities subsector). Other Printing Eyeglass Frames Other Commercial Printing (pt) for the Trade. (Included in Printing and Related Support Activities subsector). Tape Measures................. Hand and Edge Tool Manufacturing (pt) (Included in Fabricated Metal Product Manufacturing subsector). Other......................... All Other Miscellaneous Manufacturing (pt) (To Be Included in Miscellaneous Manufacturing subsector). ---------------------------------------------------------------------------------------------------------------- The abbreviation ``pt.'' means ``part of'', @ means time series break has been created that is greater than 3% of the 1992 value of shipments for the 1987 SIC industry. The abbrevision NEC is used for Not Elsewhere Classified. Description of Changes to the U.S. System A number of changes listed in this section were made for reasons of international comparability. Where one or more of the three North American countries had different definitions of an industry classification, adjustments to the definitions in one or more countries were required. In constructing NAICS, the three countries agreed to move, where change was required to attain [[Page 26614]] international comparability, in the direction of the country or countries whose existing classification definitions most closely corresponded to the production-oriented concept adopted for NAICS. Cases where the U.S. changed are listed below; other cases where Canada or Mexico moved toward the U.S. classification are not, of course, listed in this section. Two new industries were added to the 1997 industry structure for this industry subsector. Truss Manufacturing was created from part of 1987 SIC 2439, Structural Wood Members, NEC. This change was in response to an industry proposal and also groups similar production processes together. Wood Window and Door Manufacturing was created from part of 1987 SIC 2431, Millwork. The change was in response to an industry proposal, and conforms to production concepts. Two complete industries were transferred out of 1987 Major Group 24, Lumber and Wood Products. 1987 SIC 2411, Logging, was transferred into the Support Activities for Forestry subsector. This change was necessary to align the U.S. classification with Canada and Mexico, and because logging is not a production process that is similar to the manufacture of wood products from logs. 1987 SIC 2484, Wood Kitchen Cabinets, was transferred into the Furniture Manufacturing subsector. This change reflects production processes that are essentially identical with those for furniture. Three activities were transferred out of 1987 Major Group Lumber and Wood Products. Wood chair frames and wood chair seats were transferred from 1987 SIC 2426, Hardwood Dimension and Flooring Mills, to (1) Wood Office Furniture Manufacturing, (2) Wood Household Furniture Manufacturing, and (3) Upholstered Wood Household Furniture Manufacturing. This change was necessary to align the U.S. classification with Canada and Mexico. Laundry hampers were transferred from 1987 SIC 2499, Wood Products, NEC, and placed by component material in their respective industries within the Furniture Manufacturing subsector. This change was necessary to align the U.S. classification with Canada and Mexico. Mirror and picture frames were transferred 1987 SIC 2499, Wood Products, NEC, into the All Other Miscellaneous Manufacturing subsector. This change promotes international comparability with Canada and reflects similar production functions regardless of material. Four activities were transferred into the Wood Product Manufacturing, Except Furniture subsector. Cork gaskets were transferred 1987 SIC 3053, Gaskets, Packing and Sealing Devices, into Other Wood Product Manufacturing. This change promotes international comparability with Mexico, and reflects similar production functions regardless of material. Wood heels were transferred from 1987 SIC 3131, Boot and Shoe Cut Stock and Findings, into Other Wood Product Manufacturing. This change promotes international comparability with Mexico, while reflecting similar production functions. Wood signs were transferred from 1987 SIC 3993, Signs and Advertising Specialities, into Other Wood Product Manufacturing. This change promotes international comparability with Mexico, while reflecting similar production functions. Burnt wood articles were transferred from 1987 SIC 3999, Manufacturing Industries, NEC, into Other Wood Product Manufacturing. This change was necessary to align the U.S. classification with Canada and Mexico. Also several activities were transferred within the Lumber and Wood Products Major Group. The number of industries decreased from 17 in 1987 to 14 in 1997. For time series linkage 11 of the 17 1987 industries are comparable within the three percent of the 1997 industries. Part X--Proposed New Industry Structure for Rental and Leasing Section A--NAICS Structure North American Industry Classification System (NAICS) Agreement Number 20 This Document represents the proposed agreement on the structure of the North American Industry Classification System (NAICS) for the following industries: Rental and Leasing The detailed NAICS structure along with a brief description of the structure is attached (Attachments 1 and 2). Each country agrees to release a copy of the proposed NAICS structure to interested data users. Comments received will be shared among the countries and additional discussions will be held before a final decision on the structure is made. Each country may add additional detailed industries, below the 4-digit level of NAICS, as necessary to meet national needs, so long as this additional detail aggregates to a 4-digit NAICS level in order to ensure full comparability among the three countries. This NAICS structure was presented and provisionally accepted at the NAICS Committee meeting held on November 8 and November 9, 1995 in Washington, D.C. ------------------------------------------------------------------------ Accepted Signature Date -------------------------------