# Presentation: 635924

## Introduction to the Economic Census

***Introduction to the Economic Census***

## What Users Need to Know

***Economic Census***
***Highlights and uses***
***How the data are classified (SIC / NAICS)***
***How the data are published (1997 / 2002)***
***Working with the data ***
***Local data from current programs***

**Notes:**
There are several parts to this presentation.  For most of the time, I will focus on the Economic Census.
First, I will talk about the scope of the census, and how people use economic census data.  
Next, I will talk about industry classification.  The 1997 Economic Census introduced the new North American Industry Classification System.  I will tell what this means, and its impact on your SIC-based statistics.
I will talk about products from the 1997 Economic Census and when their counterparts for 2002 are coming out.
 Then [after a short break], I will review new tools that will help you use the data, and where you can get more information.

Finally, I will broaden the scope to deal with other data sets collected annually that include information for local areas.

## Economic
  data collected from businesses

Demographic
  data collected from households

**  **data collected from** businesses**
**      **
**Demographic**
**  **data collected from** households**

***Census Terminology***

**Notes:**
Let me introduce you to a bit of our jargon.  When we at the Census Bureau refer to economic data we are referring to data that we collect from businesses.  We use the term demographic to refer to data collected from households.  

Of course, there are lots of important data about the American economy that can be gleaned from the income, occupation, and labor force information published in Census 2000 and from other demographic surveys, but those data are beyond the scope of this presentation.

## Economic Data in the News

**Notes:**
The Census Bureau publishes a wide variety of statistics about business.  Some of the statistics that make the news include--

## Principal Economic Indicators

**  ****Manufacturing and Trade:  Inventories and Sales**
-   Monthly Wholesale Trade
-   Manufactures’ Shipments, Inventories and Orders
**Advance M3**
**  ****Housing Starts**
-   Value of New Construction Put in Place
-   Housing Completions
-   New Homes Sold and for Sale
**  ****US International Trade in Goods and Services**
-   Quarterly Financial Report (two releases)
-   Housing Vacancies

***Principal Economic Indicators***

**Notes:**
■  Monthly retail sales,
■  Manufacturers shipments, inventories and orders
■  International Trade in Goods and Services...
■  These are some of what we call the Principal Economic Indicators

## Surveys vs Census

- Every 5 years   ***(years ending in 2 & 7)***
- Industry/product detail
- Detailed Geography

***Economic Surveys***
- Annual, quarterly,    monthly
- Limited detail
- Mostly national

***Surveys vs Census***

**Notes:**
But the surveys that make the best news for their frequency and timeliness are not necessarily the same ones that provide all of the details needed for many practical businesses decisions.

While we have a number of surveys that provide annual, quarterly and monthly data, they mostly have limited industry detail, and they mostly tell us only what is going on in the nation as a whole.

Fortunately, once every 5 years, we have a much larger survey we call the Economic Census.  The census provides us with much greater detail about specific industries and about the products they produce or sell.

## 1992 Economic Census

***Treated as 8 separate programs***

***Mineral Industries***
***Construction Industries ***
***Manufactures***
***Wholesale Trade***
***Retail Trade***
***Transportation, Communications, Utilities***
***Finance, Insurance, Real Estate***
***Service Industries***

***1992 Economic Census***

**Notes:**
We take an economic every 5 years, for years ending in 2 or 7. 

Perhaps some of you are familiar with past economic censuses.  The 1992 census, for example, was treated as 8 separate censuses, as shown here.  Our ‘daisy’ logo tried to pull them all together, but they still were published as if they were separate programs.

## 1997 Economic Census logo

**Notes:**
For 1997 we integrated many more aspects of planning, collection, and dissemination than ever before – so much so that the lines between sectors have finally blurred.  From now on, we will identify the Economic Census as a single entity. 

## Sector contribution to GDP

***Economic Census Coverage***

**Sector contribution to GDP**

**Notes:**
The Economic Census covers most, but not quite all, economic activity.  The Census Bureau conducts a separate Census of Governments and the U.S. Department of Agriculture conducts a separate Census of Agriculture.  Taken together, these censuses cover about 98 percent of economic activity.

The 1997 Economic Census, per se, covers only the nonfarm, private economy, about 85% of the pie.  

The biggest 3 wedges in the pie are manufacturing, service industries, and finance, insurance, and real estate or FIRE.  These relationships have changed over time.  So let’s introduce the time dimension, and look at each sector’s relative contribution from 1959 to 2001 for the nation as a whole.

[if asked, ‘not covered’ includes railroads, large scheduled airlines, churches, labor unions, and private households employing nannies]

## Service sectors growing Gross Domestic Product: 1959-2001

**Notes:**
 Let me draw your attention to two of the bands that have changed significantly in width during the span of years shown.

   The wide bright-blue band toward the bottom represents the manufacturing.  Back in 1959, on the far left, manufacturing accounted for nearly 30 percent of economic activity – by 2001, on the far right, that band had narrowed to less than 15 percent.  The value of manufactured goods has gone up in absolute terms, but so has everything else. In relative terms manufacturing is less important.

   At the same time, the yellow band on the chart is getting wider , representing growth in that group of businesses called service industries, from less than 10 percent of the economy to more than 20 percent

## Economic Census  Data Collection

***Economic Census  ******Data Collection***

**Notes:**
We collect most of the data in the census by mail: for the 2002 Economic Census we sent forms to 5 million companies in December 2002.  We waited until year-end so companies could report all of their activity during the calendar year. .. And much of the data collection is still underway during 2003. 

We used more than 600 variations on the census form, so that each business could respond in terms meaningful to its own industry.

Most businesses in the U.S. are actually very small –- nearly 3/4 are self employed, yet they account for only about 3% of economic activity.   Rather than send out 16 million more forms, we substituted information from the administrative records of other federal agencies. 

## Increasing Census Coverage

**Notes:**
Parts of the Economic Census date back to 1810, although the Economic Census didn’t really take its current form until 1954.  Note, in particular, that coverage of most of Transportation, Communications, and Utilities and Finance, Insurance, and Real Estate began only in 1992.  So some time series may be relatively short.

##  Greenspan quote

- 	“The Economic Census is indispensable to understanding America’s economy...”
- 	--**Alan Greenspan, Chairman, Federal Reserve Board of Governors**

-  Greenspan quote

**Notes:**
All of these statistics are very important to policy makers and business people.

Alan Greenspan has said that “The Economic Census is indispensable to understanding America’s economy”

## Public Sector Uses

-  Benchmarking
-  Tracking economic change
-  Attracting new businesses
-  Assisting business    development

**Notes:**
The Economic Census serves a number of important needs in the public sector.
■  Government agencies use the census as the foundation--or benchmark--for other statistics and surveys, from the Gross Domestic Product to monthly retail sales.
■  Policy-making agencies in government use census data to:
   ■  Measure and track in the local economies, and
   ■  Analyze the impact of policies and economic programs
■  Local agencies use economic census data to focus efforts to attract new business and retain existing firms, and to assist entrepreneurs in business development.

##  Donohue quote

-  Donohue quote

- “Sound and timely economic
- data are the fuel that powers
- business decision making...”
-  --**Thomas J. Donohue, President,**
**United States Chamber of Commerce**

**Notes:**
These data are not just for government use.  The president of the U.S. Chamber of Commerce has remarked that "Sound and timely economic data are the fuel that powers business decision making..."

## Private Sector Uses

**Study your industry**
- 	Market share
- 	Product trends
- 	Strategic planning

**What’s my share?**
**How does my firm compare?**

**Notes:**
Businesses are especially important as data users because it is they who provide the data in the first place.

First, firms can look at their own industry.  A firm can compare its own statistics with figures for the industry, computing market share and evaluating its own growth and product mix relative to the competition.

## Private Sector Uses

**Study your industry**
- 	Market share
- 	Product trends
- 	Strategic planning
**Study business markets**
- 	Site locations
- 	Sales territories
- 	Forecasting sales

**Where are my customers? suppliers?  competitors?**

**Notes:**
Second, firms use census data in business-to-business marketing.  Manufacturers and distributors that sell their products to or through other businesses use the economic census to study those markets, and then apply what they have found out in
         Locating plants, warehouses, and stores; and
         Laying out sales territories;
         Making sales forecasts.
■  Of course, businesses engaged in marketing to household consumers (B-to-C instead of B-to-B), make many of these same types of decisions using data about people--from the 2000 Census of Population and Housing.

## Private Sector Uses

**Study your industry**
- 	Market share
- 	Product trends
- 	Strategic planning
**Study business markets**
- 	Site locations
- 	Sales territories
- 	Forecasting sales
**Evaluate investments**
- 	Estimate market size
- 	Data for loan applications

**Notes:**
Third, firms use census data to evaluate investment opportunities.  This can be especially important to small businesses if they want someone else to invest in their business, as when they apply for a loan.  Even if the the owner of a small shop knows his or her markets and the competition enough to run day-to-day operations, that owner may sometime need to convince someone else--like a bank's loan officer or a venture capitalist--just how good the business opportunity is.  Census figures on the market might just win the day.

## Transition to next segment

***Introduction to the Economic Census***