I am still travelling down the rabbit hole of manufacturing. Oftentimes I am looking up companies via their ‘NAICS’ code. This stands for North American Industry Classification System and is used to classify business establishments according to type of economic activity or process of production. There are six digits in codes and all codes that with 31, 32 & 33 represent manufacturers. There are 666,849 manufacturing businesses in the US when quantified by NAICS codes.
I just learned the NAICS updates its codes every five years. The most recent changes were in 2012 and 2007. The next batch of changes will come in 2017 but the deadline for comments from the public passed already on July 21, 2014. This is interesting because within the NAICS codes we can see emerging industries with the creation of a new code and watch how industries evolve as categories diminish.
After reading all about it, I give you takeaways of the latest round of changes from a document at census.gov titled Federal Register, Part II, Office of Management and Budget. May 12 2010. This is a report just before the latest 2012 changes.
The ECPC (Economic Classification Policy Committee) had reviewed 65 comments. They then made recommendations based on four guidelines:
- Because of the cost of change and disruption of statistical data that have already resulted from ongoing implementation of NAICS, changes would be limited to those that significantly improve the relevance and efficiency of the classification system;
- They will recommend new and emerging industries;
- They will recommend revisions to issues;
- They will make changes to account for errors and omissions as well as recommend narrative improvements to clarify the content of existing industries.
The following is a summary of the 65 comments:
-ten addressed reducing manufacturing’s detail because of inability to publish statistical data for these industries due to decreasing number of establishments, decreasing employment, and/or decreasing value of shipments over time; and increasing difficulty in stable and consistent classification of establishments into these industries due to decreasing specialization and coverage within the industries. In the end they recommended the decrease of 108 6-digit industries in a way that would aggregate any that had been under these classifications to the 5-digit industry level. (table in Part IV)
-nine made suggestions for the most appropriate classification of units that outsource manufacturing transformation activities. They considered impact on economic programs of major statistical agencies and on the resulting comparability & consistency of the economic data published across the agencies. In the end they recommended classifying these activities, even for companies that outsourced 100 percent of activities while being responsible for the overall responsibility and risk for production, into manufacturing over the suggestion towards wholesalers.
-three addressed clarification of the classification of publishers’ sales offices, distribution centers, and logistics service providers. The ECPC resolved to recommend classification of publishers’ sales offices in the information sector, classification of distribution centers supplying affiliated retailers in warehousing and storage, and classification of units providing logistics services based on the primary industrial activity of the establishments being classified.
-46 comments requested specific changes to industries. Thirty-nine of those comments requested creation of new industries, including five requests for an ecosystem health care assistance industry or sector, three requests for an industry covering the delivery of orthotic and prosthetic devices, two requests to create an industry for the cryogenic treatment of metal, two for a nanotechnology research and development industry, several for industries related to renewable energy, and single requests for other new industries such as cultural resources management green jobs, technical ceramics manufacturing, public health service, simulation, erosion control contractors, and classic car retail showrooms. the rest requested revisions or clarifications of content of existing NAICS industries, such as the design service industries, the display advertising industry, and the industries in Sector 62 related to elder care and disability services. One request proposing new industries in the utilities sector to identify renewable energy resulted in the recommendation of four new industries based on unique production processes for solar electric power generation, wind electric power generation, geothermal electric power generation, and biomass electric power generation. They also recommended changes in the agriculture; construction; manufacturing; and professional, scientific, and technical services sectors for 2012 (Part III).
-there were also recommendations for content revisions
http://www.census.gov/eos/www/naics/federal_register_notices/notices/fr12my10.pdf