Document ID: EPA-HQ-TRI-2002-0003-0014
Agency: epa
Document Type: Proposed Rule
Title: North American Industry Classification System - Update for 2002
Posted Date: 2005-06-28T04:00Z

[
Federal
Register:
April
20,
2000
(
Volume
65,
Number
77)]
[
Notices]
[
Page
21241­
21282]
From
the
Federal
Register
Online
via
GPO
Access
[
wais.
access.
gpo.
gov]
[
DOCID:
fr20ap00­
87]

[[
Page
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Part
II
Office
of
Management
and
Budget
­­­­­­­­­­­­­­­­­­­­­­­­­­­­­­­­­­­­­­­­­­­­­­­­­­­­­­­­­­­­­­­­­­­­­­­

North
American
Industry
Classification
System­­
Update
for
2002;
Notice
[[
Page
21242]]

­­­­­­­­­­­­­­­­­­­­­­­­­­­­­­­­­­­­­­­­­­­­­­­­­­­­­­­­­­­­­­­­­­­­­­­

OFFICE
OF
MANAGEMENT
AND
BUDGET
North
American
Industry
Classification
System­­
Update
for
2002
AGENCY:
Office
of
Management
and
Budget,
Executive
Office
of
the
President.

ACTION:
Notice
of
solicitation
of
comments
on
the
Economic
Classification
Policy
Committee's
recommendations
for
the
2002
revision
of
the
North
American
Industry
Classification
System.

­­­­­­­­­­­­­­­­­­­­­­­­­­­­­­­­­­­­­­­­­­­­­­­­­­­­­­­­­­­­­­­­­­­­­­­

SUMMARY:
Under
Title
44
U.
S.
C.
3504(
e),
the
Office
of
Management
and
Budget
(
OMB)
seeks
public
comment
on
the
advisability
of
adopting
the
proposed
North
American
Industry
Classification
System
(
NAICS)
updates
for
2002.
OMB's
Economic
Classification
Policy
Committee
(
ECPC)
recommends
an
update
of
the
industry
classification
system
to
extend
the
harmonized
three­
country
classification
structure
to
construction
and
to
recognize
important
changes
in
the
retail
trade
and
information
sectors.
In
addition,
as
an
interim
measure
in
the
United
States,
the
ECPC
recommends
restructuring
of
the
Wholesale
Trade
sector
to
reflect
differences
in
production
functions
and
to
capture
more
accurately
the
rapidly­
growing
business­
to­
business
electronic
markets
developing
in
the
United
States.
This
notice:
(
1)
Summarizes
the
background
for
the
proposed
revisions
to
NAICS
1997
in
Part
I;
(
2)
contains
a
summary
of
public
comments
in
Part
II;
(
3)
details
the
proposed
structure
changes
agreed
upon
by
the
three
countries
in
Part
III;
and
(
4)
provides
a
comprehensive
listing
of
proposed
changes
for
national
industries
and
their
link
to
NAICS
1997
industries
in
Part
IV.
OMB
published
a
notification
of
intention
to
complete
portions
of
NAICS
in
a
February
25,
1999,
Federal
Register
notice
(
64
FR
9416­
9419).
That
notice
solicited
comments
on
the
advisability
of
revising
the
NAICS
1997
structure
for
2002
and
solicited
comments
on
the
creation
of
new
industries
in
the
Construction
and
Wholesale
Trade
Sectors,
modifications
to
the
national
industries
for
department
stores
and
nonstore
retailers,
and
other
changes
identified
as
necessary
during
the
initial
implementation
of
NAICS
1997.
The
deadline
for
submitting
comments
was
April
26,
1999.
After
considering
all
proposals
from
the
public,
consulting
with
a
large
number
of
U.
S.
data
users
and
industry
groups,
and
undertaking
extensive
discussions
with
Statistics
Canada
and
Mexico's
Instituto
Nacional
de
Estadistica,
Geografia
e
Informatica
(
INEGI),
the
ECPC,
INEGI,
and
Statistics
Canada
developed
a
revised
structure
for
both
the
Construction
and
Information
sectors
of
NAICS
that
would
apply
to
all
three
North
American
countries.
For
Wholesale
Trade,
after
extensive
discussions
with
Statistics
Canada
and
INEGI,
the
representatives
of
the
three
countries'
statistical
agencies
decided
to
delay
three­
country
changes
to
this
sector
and
instead
plan
for
a
complete
restructuring
of
the
distribution
network
industries
(
wholesale,
retail,
transportation,
and
warehousing)
in
2007.
In
the
interim
the
ECPC
recommends
restructuring
the
Wholesale
Trade
sector
to
reflect
differences
in
production
functions
between
those
wholesalers
that
take
title
to
goods
and
those
that
do
not,
and
to
capture
more
accurately
the
rapidly­
growing
business­
to­
business
electronic
markets
developing
in
the
United
States.
The
ECPC
also
developed
proposed
additional
U.
S.
industry
detail
in
the
Retail
Trade
sector
for
NAICS
United
States.
The
ECPC
recommends
that
NAICS
United
States
2002
incorporate
these
changes
as
shown
in
Parts
III
and
IV.
Following
an
extensive
process
of
development
and
discussions
by
the
ECPC,
with
maximum
possible
public
input,
OMB
seeks
comment
on
the
advisability
of
revising
NAICS
to
incorporate
the
changes
published
in
this
notice.
The
modified
NAICS
would
be
employed
in
relevant
data
collections
by
all
U.
S.
statistical
agencies
beginning
with
the
reference
year
2002.
Statistics
Canada
and
INEGI
are
recommending
acceptance
of
the
proposed
revision
of
the
NAICS
system
for
industry
classification
in
the
statistical
programs
of
their
national
systems
and
are
seeking
comments
in
their
respective
countries.
Representatives
of
the
three
countries
will
hold
further
discussions
to
consider
public
comments
that
they
receive.

DATES:
To
ensure
consideration
of
comments
on
the
adoption
and
implementation
of
the
NAICS
revisions
detailed
in
this
notice,
comments
must
be
in
writing.
You
should
submit
them
as
soon
as
possible,
but
no
later
than
June
19,
2000.
This
proposed
revision
to
NAICS
would
become
effective
in
the
U.
S.
on
January
1,
2002.
ADDRESSES:
You
should
send
correspondence
about
the
adoption
and
implementation
of
NAICS
revisions
as
shown
in
this
Federal
Register
notice
to:
Katherine
K.
Wallman,
Chief
Statistician,
Office
of
Management
and
Budget,
10201
New
Executive
Office
Building,
Washington,
DC
20503,
telephone
number:
(
202)
395­
3093,
FAX
number:
(
202)
395­
7245.
You
should
address
inquiries
about
the
content
of
industries
or
requests
for
electronic
copies
of
the
tables
to:
Carole
Ambler,
Chair,
Economic
Classification
Policy
Committee,
Bureau
of
the
Census,
Room
2633­
3,
Washington,
DC
20233,
telephone
number:
(
301)
457­
2668,
FAX
number:
(
301)
457­
1343.
Electronic
Availability
and
Comments:
This
document
is
available
on
the
Internet
from
the
Census
Bureau
via
WWW
browser
and
E­
mail.
To
obtain
this
document
via
WWW
browser,
connect
to
http://
www.
census.
gov/
naics.
This
WWW
page
also
contains
previous
NAICS
Federal
Register
notices
and
related
documents.
You
may
send
comments
via
E­
mail
to
pbugg@
omb.
eop.
gov
with
subject
NAICS02.
OMB
will
include
in
the
official
record
comments
received
via
E­
mail
at
this
address
with
this
subject
by
the
date
specified
above.

FOR
FURTHER
INFORMATION
CONTACT:
Paul
Bugg,
10201
New
Executive
Office
Building.,
Washington,
DC
20503,
E­
mail
address:
pbugg@
omb.
eop.
gov,
telephone
number:
(
202)
395­
3093,
FAX
number:
(
202)
395­
7245.

SUPPLEMENTARY
INFORMATION:

Part
I:
Background
of
NAICS
1997
NAICS
is
a
system
for
classifying
establishments
by
type
of
economic
activity.
Its
purposes
are:
(
1)
To
facilitate
the
collection,
tabulation,
presentation,
and
analysis
of
data
relating
to
establishments,
and
(
2)
to
promote
uniformity
and
comparability
in
the
presentation
and
analysis
of
statistical
data
describing
the
economy.
Federal
statistical
agencies
use
NAICS
to
collect
or
publish
data
by
industry.
It
also
is
used
widely
by
State
agencies,
trade
associations,
private
businesses,
and
other
organizations.
INEGI
of
Mexico,
Statistics
Canada,
and
the
United
States
Office
of
Management
and
Budget
(
OMB),
through
its
Economic
Classification
Policy
Committee
(
ECPC),
collaborated
on
NAICS
to
make
the
industrial
statistics
produced
in
the
three
countries
comparable.
NAICS
is
the
first
industry
classification
system
developed
in
accordance
with
a
single
principle
of
aggregation,
the
principle
that
producing
units
that
use
similar
production
processes
should
be
grouped
together
in
the
classification.
NAICS
also
reflects
in
a
much
more
explicit
way
the
enormous
changes
in
technology
and
in
the
growth
and
diversification
of
services
that
have
[[
Page
21243]]

marked
recent
decades.
Industry
statistics
presented
using
NAICS
are
also
comparable
with
statistics
compiled
according
to
the
latest
revision
of
the
United
Nations'
International
Standard
Industrial
Classification
(
ISIC,
Revision
3)
for
some
sixty
high­
level
groupings.
For
the
three
countries,
NAICS
provides
a
consistent
framework
for
the
collection,
tabulation,
presentation,
and
analysis
of
industrial
statistics
used
by
government
policy
analysts,
by
academics
and
researchers,
by
the
business
community,
and
by
the
public.
However,
because
of
different
national
economic
and
institutional
structures
as
well
as
limited
resources
and
time
for
constructing
the
1997
NAICS,
the
NAICS
structure
was
not
made
entirely
comparable
at
the
individual
industry
level
across
all
three
countries
at
that
time.
The
completion
effort
represented
in
this
notice
originally
focused
on
the
construction
and
wholesale
trade
sectors.
In
the
1997
NAICS
these
two
sectors
were
comparable
at
the
two­
digit
level
for
all
three
North
American
countries.
Throughout
its
development,
NAICS
has
been
guided
by
four
principles:
(
1)
NAICS
is
erected
on
a
production­
oriented
or
supply­
based
conceptual
framework.
This
means
that
producing
units
that
use
the
same
or
similar
production
processes
are
grouped
together
in
NAICS.
(
2)
NAICS
gives
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
is
maintained
to
the
extent
possible,
given
the
need
to
reflect
changes
in
the
economy
and
proposals
from
data
users.
Adjustments
will
be
required
for
sectors
where
the
United
States,
Canada,
and
Mexico
have
incompatible
industry
classification
definitions
in
order
to
produce
a
common
industry
system
for
all
three
North
American
countries.
(
4)
The
system
strives
for
compatibility
with
the
two­
digit
level
of
the
International
Standard
Industrial
Classification
of
All
Economic
Activities
(
ISIC
Rev.
3)
of
the
United
Nations.
The
ECPC
is
committed
to
maintaining
the
principles
of
NAICS.
For
example,
the
proposed
split
in
the
national
industry
for
department
stores
will
separately
identify
two
distinct
and
economically
significant
types
of
operations
in
the
United
States
in
accordance
with
principle
1.
The
ECPC
is
recommending
the
revisions
for
nonstore
retailers
and
new
Internet
information
businesses
based
on
NAICS
principle
2.
The
rapid
growth
of
Internet
companies
and
the
lack
of
a
structural
method
for
identifying
these
emerging
industries
justify
the
additional
NAICS
and
U.
S.
national
detail.
The
current
round
of
completion
activities
is
limited
in
scope
based
on
NAICS
principle
3
regarding
time
series
continuity.
The
ECPC
believes
that
the
narrow
focus
of
the
completion
activities
and
the
importance
of
Construction
and
Information
to
the
economies
of
all
three
countries
justify
the
resulting
time
series
breaks.
Users
are
encouraged
to
implement
the
most
current
structure
of
NAICS
as
it
becomes
available.

Part
II:
Summary
of
Public
Comments
In
response
to
the
February
25,
1999,
Federal
Register
notice,
the
ECPC
received
28
comments
regarding
specific
industries
and
recommended
changes
to
the
structure
of
NAICS
1997.
Twenty­
two
of
the
comments
focused
on
the
Construction
Sector,
three
focused
on
the
Wholesale
Trade
Sector,
and
three
were
outside
the
scope
of
revision
as
defined
by
the
ECPC.
Public
proposals
for
individual
industries
from
all
three
countries
were
considered
for
acceptance
if
the
proposed
industry
was
based
on
the
production­
oriented
concept
of
the
system.
When
a
proposal
was
not
accepted,
it
was
usually
because:
(
a)
The
resulting
industry
would
have
been
too
small
in
the
U.
S.,
(
b)
data
indicated
that
the
specialization
ratio
was
low
(
the
specialization
ratio
indicates
the
extent
to
which
the
establishments
in
a
given
industry
concentrate
on
the
activities
that
define
the
industry),
or
(
c)
the
proposal
did
not
meet
the
production­
oriented
criterion
for
forming
an
industry
in
NAICS.
The
ECPC
received
a
number
of
comments
that
suggested
changes
to
NAICS
that
were
not
accepted.
All
of
these
suggestions
were
carefully
considered.
Some
suggestions
were
modified
at
the
request
of
the
ECPC
to
better
meet
the
objectives
of
NAICS.
Other
suggestions
proposed
products
(
rather
than
industries);
these
will
be
considered
in
the
future
development
of
a
product
system.
Still
other
suggestions
for
change
could
not
be
justified
on
a
production
basis,
or
could
not
be
implemented
in
statistical
programs,
for
various
reasons,
and
thus
were
not
accepted.
The
ECPC
is
preparing
individual
responses
to
these
suggestions,
carefully
explaining
why
they
were
not
accepted.
Many
of
the
twenty­
two
comments
that
related
to
the
Construction
sector
requested
changes
or
structures
that
were
contradictory.
For
this
reason
alone,
the
ECPC
was
not
able
to
implement
all
of
the
requested
changes.
Other
comments
requested
detail
that
was
not
supported
by
specialization
studies
performed
using
1997
Census
of
Construction
data.
A
final
constraint
on
the
acceptability
of
proposals
was
the
necessity
for
three­
country
comparability.
A
comment
that
was
justified
on
a
production
function
basis
in
the
United
States
was
not
always
supportable
by
either
Canada
or
Mexico.
The
proposed
structure
of
the
Construction
Sector
has
limited
three­
country
comparability.
In
most
areas,
the
representatives
of
the
three
countries
attained
comparability
at
the
five­
digit
level.
The
Specialty
Trade
Contractors
subsector
is
comparable
at
the
four­
digit
level.
This
was
the
result
of
a
desire
to
allow
U.
S.
agencies
to
develop
separate
residential
and
nonresidential
data
for
Specialty
Trade
Contractors
without
creating
special
aggregations
outside
of
the
NAICS
structure.
Although
separate
residential
and
nonresidential
specialty
trade
industries
were
not
created
because
of
production
function
considerations,
the
structure
does
allow
for
residential
and
nonresidential
data
collection
by
U.
S.
statistical
agencies.
The
sixth
digit
of
the
structure
is
reserved
for
this
purpose.
This
information
can
be
derived
from
Census
Bureau
data
in
Economic
Census
years.
The
Bureau
of
Labor
Statistics
will
provide
this
information
in
the
Covered
Employment
and
Wages
Program
when
the
NAICS
2002
changes
are
implemented.
A
second
major
proposal
in
the
Construction
sector
related
to
project
delivery
methods.
In
recent
years,
Federal
and
State
procurement
laws
have
been
changed
to
allow
design­
build
as
an
alternative
to
the
traditional
design­
bid­
build
process
for
construction
projects
in
the
public
arena.
This
project
delivery
method
alternative
to
structuring
the
Construction
sector
was
not
accepted
in
the
three­
country
negotiations
for
a
variety
of
reasons.
First,
the
design­
build
terminology
is
used
differently
by
various
practitioners.
The
variation
in
use
and
meaning
will
cause
difficulties
in
classification
and
the
development
of
homogeneous
industry
groupings
without
extremely
detailed
questionnaires.
Such
a
level
of
detail
is
not
practical.
Next,
while
of
growing
importance
in
the
United
States
and
Canada,
design­
build
is
not
so
prominent
in
Mexico.
Finally,
a
project
delivery
method
structure
would
have
greatly
expanded
the
number
of
industries
at
the
lowest
level
of
the
classification.
The
proposed
structure
has
31
detailed
industries
for
the
United
[[
Page
21244]]

States.
A
further
split
by
project
delivery
method
would
further
expand
the
number
of
detailed
industries
and
reduce
the
size
of
each.
The
majority
of
the
comments
received
that
related
to
Wholesale
Trade
requested
a
change
in
the
previously
agreed
upon
scope
of
the
sector.
After
extensive
discussions
with
Canada
and
Mexico,
the
representatives
decided
to
recommend
that
the
basic
delineation
between
Wholesale
Trade
and
Retail
Trade
should
remain
unchanged.
Further,
the
representatives
agreed
to
undertake
a
complete
restructuring
of
the
distribution
network
industries
(
wholesale,
retail,
transportation,
and
warehousing)
in
NAICS
2007.
In
the
interim,
the
United
States
has
restructured
NAICS
United
States
1997,
Sector
42,
Wholesale
Trade
to
more
closely
align
with
the
existing
treatment
in
Canada
and
Mexico.
For
the
United
States,
the
ECPC
has
created
three
new
subsectors:
423,
Merchant
Wholesalers,
Durable
Goods;
424,
Merchant
Wholesalers,
Nondurable
Goods;
and
425,
Wholesale
Electronic
Markets
and
Agents
and
Brokers.
These
subsectors
more
clearly
separate
types
of
wholesale
trade
businesses
and
will
lead
to
more
homogeneous
statistical
data.
The
merchant
wholesaler
subsectors
are
characterized
by
establishments
that
take
title
to
goods
and
play
the
role
of
principal
in
the
buying
and
selling
of
goods.
The
Wholesale
Electronic
Markets
and
Agents
and
Brokers
subsector
is
characterized
by
establishments
that
act
on
behalf
of
sellers
or
facilitate
wholesale
transactions
but
do
not
actually
take
title
to
the
goods.
Wholesale
trade
is
rapidly
changing.
Many
traditional
wholesale
trade
functions
are
being
outsourced
to
storage,
finance,
logistics,
or
transportation
specialists.
In
addition
to
these
changes,
the
Internet
has
greatly
expanded
markets
and
supplier
customer
bases.
In
order
to
identify
these
changes
to
the
extent
possible,
the
ECPC
recommends
that
subsector
425,
Wholesale
Electronic
Markets
and
Agents
and
Brokers
be
split
into
two
separate
industries.
The
first
would
include
the
wholesale
trade
electronic
markets
while
the
second
would
include
agents
and
brokers.
The
electronic
markets
provide
guidance
and
assistance
to
both
buyers
and
sellers.
They
also
provide
a
unified,
one
stop,
purchasing
environment
with
common
requirements
across
a
large
number
of
suppliers.
The
rapid
growth
of
the
business
to
business
(
B2B)
electronic
markets
reflects
the
considerable
efficiencies
that
can
be
obtained
through
the
use
of
advanced
technology.
Separate
identification
of
this
rapidly
growing
activity
will
allow
a
more
thorough
and
reflective
analysis
of
wholesale
trade
in
relation
to
the
overall
changes
in
distributive
trades
in
2007.
In
addition
to
working
on
the
sectors
described
in
the
February
25,
1999,
Federal
Register
notice
that
were
explicitly
targeted
for
completion,
the
rapid
growth
of
the
Internet
and
electronic
commerce
resulted
in
a
decision
by
the
three
countries
to
re­
evaluate
the
Information
sector
as
well.
Although
new
in
1997,
the
Information
sector
lacked
finite
categories
related
to
new
Internet
activities
such
as
Internet
service
providers,
web
search
portals,
and
Internet
publishing
and
broadcasting.
The
second
NAICS
principle
specifically
targets
new
and
emerging
industries.
The
North
American
partners
in
NAICS
agreed
that
the
importance
of
statistical
data
related
to
new
Internet
businesses
outweighed
the
time
series
continuity
criterion
also
used
in
NAICS
development.
A
full
description
of
the
recommended
provisional
changes
to
the
Information
sector
is
included
in
Part
III.
In
addition
to
the
changes
listed
above,
the
ECPC
is
proposing
several
minor
changes
to
titles
of
NAICS
industries
that
have
no
impact
on
the
content
of
those
industries.
The
ECPC
recommends
the
following
title
changes:
NAICS
32611,
Unsupported
Plastics
Film,
Sheet,
and
Bag
Manufacturing,
will
be
changed
to
Plastics
Packaging
Materials
and
Unlaminated
Film
and
Sheet
Manufacturing.
NAICS
326111,
Unsupported
Plastics
Bag
Manufacturing,
will
be
changed
to
Plastics
Bag
Manufacturing.
NAICS
326112,
Unsupported
Plastics
Packaging
Film
and
Sheet
Manufacturing,
will
be
changed
to
Plastics
Packaging
Film
and
Sheet
(
including
Laminated)
Manufacturing.
NAICS
326113,
Unsupported
Plastics
Film
and
Sheet
(
except
Packaging)
Manufacturing,
will
be
changed
to
Unlaminated
Plastics
Film
and
Sheet
(
except
Packaging)
Manufacturing.
NAICS
32612,
Plastics
Pipe,
Pipe
Fitting,
and
Unsupported
Profile
Shape
Manufacturing,
will
be
changed
to
Plastics
Pipe,
Pipe
Fitting,
and
Unlaminated
Profile
Shape
Manufacturing.
NAICS
326121,
Unsupported
Plastics
Profile
Shape
Manufacturing,
will
be
changed
to
Unlaminated
Plastics
Profile
Shape
Manufacturing.
NAICS
326130,
Laminated
Plastics
Plate,
Sheet,
and
Shape
Manufacturing,
will
be
changed
to
Laminated
Plastics
Plate,
Sheet
(
except
Packaging),
and
Shape
Manufacturing.
NAICS
444220,
Nursery
and
Garden
Centers,
will
be
changed
to
Nursery,
Garden
Center,
and
Farm
Supply
Stores
to
describe
more
completely
the
content
of
the
industry.
NAICS
452910,
Warehouse
Clubs
and
Superstores,
will
be
changed
to
Warehouse
Clubs
and
Supercenters.
The
term
supercenter
more
adequately
describes
the
content
of
the
NAICS
industry.
NAICS
561330,
Employee
Leasing
Services,
will
be
changed
to
Professional
Employer
Organizations
to
more
closely
reflect
common
industry
terminology.
The
United
States
is
also
taking
this
opportunity
to
create
additional
national
level
detail
for
department
stores
and
nonstore
retailers.
These
changes
will
create
more
meaningful,
homogeneous
industries
for
the
United
States.
Department
Stores,
NAICS
45211,
will
be
split
into
two
new
6­
digit
industries:
Department
Stores
(
except
Discount),
NAICS
452111,
and
Discount
Department
Stores,
NAICS
452112.
Electronic
Shopping
and
Mail­
Order
Houses,
NAICS
45411,
will
be
split
into
three
new
6­
digit
industries:
Electronic
Shopping,
NAICS
454111;
Electronic
Auctions,
NAICS
454112;
and
Mail­
Order
Houses,
NAICS
454113.
The
proposed
changes
for
electronic
shopping
acknowledge
the
rapid
growth
of
these
activities
in
the
United
States.
The
proposed
industry
for
Electronic
Shopping
includes
separate
establishments
engaged
in
primarily
providing
electronic
shopping
services.
The
structure
and
codes
for
these
new
industries
are
detailed
in
Part
IV
of
this
notice.

Time
Series
Continuity
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,
analysts
can
assess
the
full
impact
of
the
revision.
Data
producers
then
may
measure
the
reallocation
of
the
data
at
aggregate
industry
levels
and
develop
a
concordance
between
the
old
and
new
series
for
that
given
point
in
time.
The
concordance
creates
a
crosswalk
between
the
old
and
new
classification
systems.
Statistical
agencies
in
the
U.
S.
are
planning
links
between
the
1997
NAICS
and
2002
NAICS
(
with
U.
S.
national
detail).

[[
Page
21245]]
ECPC
Recommendations
for
the
Hierarchical
Structure,
Industries,
and
Coding
System
for
the
2002
NAICS
Revisions
Parts
III
and
IV
below
present
the
ECPC's
final
recommendations
for
how
United
States
statistical
agencies
would
revise
the
affected
sectors
and
industries
in
the
2002
NAICS
classification
system
for
the
United
States.
The
tables
show
the
proposed
2002
hierarchy,
including
NAICS
and
U.
S.
national
detail
industries,
and
the
proposed
coding
system
in
2002
NAICS
sequence,
for
the
affected
sectors
and
industries.
Parts
III
and
IV
include
all
ECPC
recommended
changes
to
the
structure
based
on
public
comment
and
discussions
with
INEGI
and
Statistics
Canada.

John
T.
Spotila,
Administrator,
Office
of
Information
and
Regulatory
Affairs.

Part
III­­
Proposed
Revisions
to
the
NAICS
Structure
Section
A­­
NAICS
Structure­­
Construction
North
American
Industry
Classification
System
(
NAICS
2002)
Agreement
Number
32
This
document
represents
the
proposed
agreement
on
the
structure
of
the
North
American
Industry
Classification
System
(
NAICS)
for
the
construction
sector.
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
internationally
agreed
upon
level
of
NAICS,
as
necessary
to
meet
national
needs,
so
long
as
this
additional
detail
aggregates
to
an
internationally
agreed
upon
level
in
order
to
ensure
full
comparability
among
the
three
countries.
This
NAICS
structure
was
presented
and
accepted
at
the
NAICS
Committee
meeting
held
on
November
30
through
December
2,
1999,
in
Ottawa,
Canada.

­­­­­­­­­­­­­­­­­­­­­­­­­­­­­­­­­­­­­­­­­­­­­­­­­­­­­­­­­­­­­­­­­­­­­­­
­
Accepted
Signature
Date
­­­­­­­­­­­­­­­­­­­­­­­­­­­­­­­­­­­­­­­­­­­­­­­­­­­­­­­­­­­­­­­­­­­­­­­
­
Canada........................
________
Richard
12/
2/
1999
Barnabe________________
___
Mexico........................
________
Enrique
12/
2/
1999
Ordaz__________________
_
United
States.................
________
Carole
12/
2/
1999
Ambler_________________
___
­­­­­­­­­­­­­­­­­­­­­­­­­­­­­­­­­­­­­­­­­­­­­­­­­­­­­­­­­­­­­­­­­­­­­­­
­
Attachment
1­­
NAICS
Structure
­­­­­­­­­­­­­­­­­­­­­­­­­­­­­­­­­­­­­­­­­­­­­­­­­­­­­­­­­­­­­­­­­­­­­­­
­

­­­­­­­­­­­­­­­­­­­­­­­­­­­­­­­­­­­­­­­­­­­­­­­­­­­­­­­­­­­­­­­­­­­­­­­
­
23....................................
Construction
236...................................
Construction
of
Buildings
2361..................................
Residential
Building
Construction
23611.................................
Residential
Building
Construction
2362..................................
Nonresidential
Building
Construction
23621.................................
Industrial
Building
Construction
23622.................................
Commercial
and
Institutional
Building
Construction
237...................................
Heavy
and
Civil
Engineering
Construction
2371..................................
Utility
System
Construction
23711.................................
Water
and
Sewer
Line
and
Related
Structures
Construction
23712.................................
Oil
and
Gas
Pipeline
and
Related
Structures
Construction
23713.................................
Power
and
Communication
Line
and
Related
Structures
Construction
2372..................................
Land
Subdivision
23721.................................
Land
Subdivision
2373..................................
Highway,
Street,
and
Bridge
Construction
23731.................................
Highway,
Street,
and
Bridge
Construction
2379..................................
Other
Heavy
and
Civil
Engineering
Construction
23799.................................
Other
Heavy
and
Civil
Engineering
Construction
238...................................
Specialty
Trade
Contractors
2381..................................
Foundation,
Structure,
and
Building
Exterior
Contractors
2382..................................
Building
Equipment
Contractors
23821.................................
Electrical
Contractors
23822.................................
Plumbing,
Heating,
and
Air­
Conditioning
Contractors
23829.................................
Other
Building
Equipment
Contractors
2383..................................
Building
Finishing
Contractors
2389..................................
Other
Specialty
Trade
Contractors
­­­­­­­­­­­­­­­­­­­­­­­­­­­­­­­­­­­­­­­­­­­­­­­­­­­­­­­­­­­­­­­­­­­­­­­
­

Attachment
2­­
Description
of
Construction
Sector
Draft
Classification
for
Construction
Representatives
of
the
statistical
agencies
of
Canada,
Mexico,
and
the
United
States
agree
to
a
draft
industrial
classification
for
the
Construction
sector.
The
draft
classification
of
the
construction
sector
is
divided
into
subsectors
covering
Construction
of
Buildings,
Heavy
and
Civil
Engineering
Construction,
and
Specialty
Trade
Contractors.
These
subsectors
are
further
subdivided
into
10
four­
digit
industry
groups
and
12
five­
digit
industries.

A
General
Outline
Establishments
in
the
Construction
Sector
erect
buildings,
perform
heavy
and
civil
engineering
construction,
and
perform
specialized
construction
trade
activities.
The
classification
distinguishes
between
establishments
that
are
responsible
for
an
entire
building
or
building
renovation
project
and
those
that
perform
specific
functions
during
the
erection
of
a
building
or
building
renovation
project.
A
subsector
is
provided
for
each
group.
The
classification
further
distinguishes
all
establishments
performing
civil
engineering
and
heavy
construction
activities,
whether
the
complete
project
or
a
portion
of
the
project,
in
a
third
subsector.
In
Construction
of
Buildings,
the
classification
distinguishes
between
the
[[
Page
21246]]

erection
of
residential
buildings
and
the
erection
of
nonresidential
buildings.
Each
of
these
industry
groups
includes
establishments
that
are
responsible
for
an
entire
building
or
building
renovation
project.
These
industry
groups
include
general
contractors
and
design­
builders
working
for
owners
and
operative
builders
who
undertake
the
entire
project
on
a
speculative
basis.
Establishments
in
the
Construction
of
Buildings
subsector
may
perform
specific
construction
activities
or
subcontract
for
specific
tasks.
Additionally,
each
industry
group
includes
establishments
that
are
hired
to
manage
the
project,
including
oversight
of
the
design,
financing,
bidding,
and
review
processes,
and/
or
act
as
a
liaison
between
the
owner
and
a
general
contractor,
designer,
architect,
or
engineer.
The
classification
makes
no
distinctions
in
the
residential
buildings
industry
group
because
of
differences
in
the
organization
of
construction
establishments
among
the
three
countries.
National
level
detail
will
provide
specific
information
based
on
the
type
of
structure
(
single
family
or
multi­
family),
type
of
project
(
new
structures
or
alterations
and
renovations
of
existing
structures),
or
type
of
establishment
(
general
contractor
or
operative
builder)
as
appropriate
in
each
country.
Consideration
was
given
to
each
of
these
breakouts
but
national
differences
in
the
operating
characteristics
of
establishments
prevented
three­
country
level
comparability.
Establishments
erecting
nonresidential
buildings
are
segregated
into
establishments
erecting
commercial
and
institutional
buildings
and
establishments
erecting
industrial
buildings
and
manufacturing
plants.
This
NAICS
industry
level
distinction
recognizes
the
differences
inherent
in
erecting
the
various
types
of
buildings.
Establishments
performing
heavy
construction
are
separated
into
four
industry
groups:
Utility
System
Construction;
Land
Subdivision;
Highway,
Street,
and
Bridge
Construction;
and
Other
Heavy
and
Civil
Engineering
Construction.
Industries
in
these
groups
are
engaged
in
large­
scale
projects
and
have
related
production
characteristics.
Heavy
and
Civil
Engineering
Construction
establishments
can
perform
the
work
or
subcontract
the
work
to
specialized
establishments.
Establishments
in
the
Utility
System
Construction
industry
group
construct
lines
and
related
structures
for
utility
systems.
For
example,
Water
and
Sewer
Line
and
Related
Structures
Construction
establishments
that
construct
pipelines,
distribution
lines,
irrigation
systems,
water
treatment
plants,
sewage
treatment
plants,
and
pumping
stations
are
grouped
together.
This
recognizes
the
fact
that
these
buildings
and
structures
are
inter­
related
in
a
network
environment
and
are
not
meaningfully
separated
based
on
the
particular
type
of
structure.
Land
Subdivision
is
included
in
Heavy
and
Civil
Engineering
Construction
because
of
the
similarity
of
activities
involved
with
land
subdivision
and
the
other
industry
groups.
For
example,
improved
subdivisions
often
require
installation
of
basic
utilities,
roads,
and
similar
improvements
that
are
also
included
elsewhere
in
the
Heavy
and
Civil
Engineering
Construction
subsector.
The
production
similarities
for
construction
of
highways,
streets,
and
bridges
justified
the
third
industry
group.
The
fourth,
residual,
industry
group
includes
other
heavy
and
civil
engineering
construction.
Examples
include
marine
construction,
such
as
the
building
of
ports
and
harbors,
and
construction
of
dams
for
retaining
water,
flood
control,
or
hydroelectric
power
generation
purposes.
Heavy
and
Civil
Engineering
Construction
includes
general
contractors,
design­
builders,
operative
builders,
and
those
specialty
trade
contractors
whose
activities
generally
only
apply
to
the
Heavy
and
Civil
Engineering
Construction
subsector.
The
activities
performed
by
the
specialty
trade
contractors
in
this
subsector
are
rarely
performed
elsewhere.
In
Specialty
Trade
Contractors,
NAICS
recognizes
the
highly
specialized
nature
of
a
large
number
of
small
construction
establishments.
These
establishments
concentrate
on
a
particular
construction
activity
or
group
of
activities
rather
than
accepting
responsibility
and
risk
for
an
entire
project.
This
difference
separates
these
establishments
from
the
first
two
subsectors.
Establishments
in
the
Specialty
Trade
Contractors
subsector
usually
act
as
subcontractors
for
the
general
contractors,
operative
builders,
design­
builders,
and
other
establishments
that
assume
the
risk
for
an
entire
construction
project
that
takes
place
in
the
Construction
of
Buildings
subsector.
In
this
capacity,
they
can
perform
work
as
subcontractors
or
work
directly
for
owners.
Specialty
Trade
Contractors
also
perform
repair,
renovation,
and
maintenance
on
various
systems
that
fall
within
their
specialty.
The
skills
and
equipment
used
by
specialty
trade
contractors
in
this
subsector
have
more
general
application
than
skills
and
equipment
used
by
the
specialty
trade
contractors
included
in
Heavy
and
Civil
Engineering
Construction.

Limitations
and
Constraints
of
the
Classification
Climatic
and
geological
differences
within
and
among
the
three
countries
lead
to
different
construction
techniques
and
practices
for
various
types
of
structures.
While
wood
is
a
significant
input
for
residential
housing
in
the
Northern
United
States
and
Canada,
concrete
and
stone
are
more
common
in
the
Southwest
United
States
and
in
Mexico.
Concrete
and
stone
do
not
require
siding
and
various
other
protections
that
are
required
with
wood
sheathing.
Geological
instability
results
in
different
structural
and
foundation
requirements.
Climate
conditions
dictate
more
insulation
in
northern
areas
while
less
insulation
is
appropriate
in
drier
and
warmer
climates.
These
conditions
lead
to
differing
size
and
importance
of
various
industries
throughout
North
America.
Each
subsector
varies
across
geographic
lines
based
on
the
availability
of
raw
materials
and
the
environmental
conditions
that
dictate
construction
practices.

Relationship
to
ISIC
Most
of
the
industries
in
the
NAICS
Construction
Sector
are
contained
in
Division
45,
Construction,
of
the
International
Standard
Industrial
Classification
of
All
Economic
Activities
(
ISIC,
Revision
3)
of
the
United
Nations.
There
are,
however,
some
differences
between
the
two
systems.
Both
NAICS
and
ISIC
exclude
preparation
of
oil
and
gas
fields
from
Construction.
NAICS
includes
construction
management
activities
within
each
of
the
industries
in
the
Construction
Sector
while
ISIC
classifies
construction
management
activities
in
Division
74,
Other
Business
Activities.
NAICS
includes
land
subdivision
in
Construction,
while
ISIC
classifies
land
subdivision
in
Division
70,
Real
Estate
Activities.

Some
Changes
to
the
National
Industries
During
the
initial
NAICS
development
effort,
the
three
countries
agreed
to
the
boundary
and
scope
of
the
Construction
sector
at
the
two­
digit
level.
Each
of
the
countries
developed
its
own
national
structure
at
the
three­,
four­,
five­,
and
six­
digit
levels.
The
changes
discussed
are
identified
as
NAICS
with
a
prefix
of
C
for
Canada,
U
for
the
United
States,
and
M
for
Mexico
for
previous
national
detail
and
NAICS02
for
the
draft
classification.

[[
Page
21247]]

For
Canada,
CNAICS
23
was
broken
into
two
subsectors:
CNAICS
231,
Prime
Contracting;
and
CNAICS
232,
Trade
Contracting.
NAICS02
comprises
three
subsectors:
236,
Construction
of
Buildings:
237,
Heavy
and
Civil
Engineering
Construction;
and
238,
Specialty
Trade
Contractors.
CNAICS
23141,
Construction
Management,
will
be
distributed
throughout
all
of
the
new
NAICS02
Construction
industries.
Land
Subdivision
and
Development,
CNAICS
23111
will
be
moved
from
the
subsector
for
Building
Construction
to
NAICS02
23721
within
the
Heavy
and
Civil
Engineering
Construction
subsector.
This
move
reflects
the
similarity
of
the
activities
performed
in
the
land
subdivision
industry
and
other
industries
in
the
Heavy
and
Civil
Engineering
Construction
subsector.
The
construction
of
structures,
such
as
sewage
treatment
plants
and
water
treatment
plants
will
be
moved
from
CNAICS
23139,
Other
Engineering
Construction,
to
NAICS02
2371,
Utility
System
Construction,
and
distributed
to
the
proper
industries
within
the
industry
group.
For
Mexico,
the
NAICS02
structure
is
very
similar
to
the
MNAICS
structure
developed
in
1997.
While
there
were
various
minor
reaggregations
below
the
industry
group
level,
the
subsector
levels
remained
largely
unchanged.
MNAICS
236
contained
one
industry
group,
2361
Buildings.
NAICS02
now
contains
two
industry
groups:
2361,
Residential
Buildings;
and
2632,
Nonresidential
Buildings.
MNAICS
237
was
made
up
of
two
industry
groups:
2371
Construction
of
Structures
for
Water,
Electricity,
Telecommunications,
Petroleum,
and
Gas;
and
2372,
Construction
of
Urban
Infrastructure
and
Transportation
Systems.
NAICS02
is
divided
into
four
industry
groups:
2371,
Utility
Systems
Construction;
2372,
Land
Subdivision;
2373,
Highway,
Street,
and
Bridge
Construction;
and
2379,
Other
Heavy
and
Civil
Engineering
Construction.
As
is
the
case
for
Canada,
MNAICS
23822,
Supervision
and
Management
of
Construction
projects
will
be
distributed
throughout
the
construction
industries
in
NAICS02.
For
the
United
States,
the
subsector
structures
for
UNAICS
and
NAICS02
are
very
similar.
Most
changes
occurred
below
the
subsector
level.
Of
particular
note,
UNAICS
23311,
Land
Subdivision
and
Land
Development
moved
from
the
subsector
for
construction
of
buildings
to
NAICS02
237,
Heavy
and
Civil
Engineering
Construction.
UNAICS
23499,
All
Other
Heavy
Construction,
included
water
treatment
plants,
sewage
treatment
plants
and
similar
buildings
that
are
now
included
in
NAICS02
2371,
Utility
System
Construction.
At
the
national
level,
the
United
States
has
reinstituted
an
industry
for
operative
residential
builders
that
were
not
separately
identified
in
UNAICS.
This
industry
had
existed
in
the
US
SIC.
The
United
States
also
created
a
new
national
industry
for
residential
remodeling
establishments.
In
previous
classifications,
residential
remodelers
were
classified
together
with
new
residential
construction.

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
industries
are
highly
specialized,
and
they
are
economically
significant.
Disruptions
to
time
series
are
minimal.
The
classification
achieves
comparability
at
most
five­
digit
levels
for
the
three
participating
countries.
All
three
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
new
technologies.

Section
B­­
NAICS
Structure­­
Information
Provisional
Structure
Proposed
for
Sector
51,
Information
­­­­­­­­­­­­­­­­­­­­­­­­­­­­­­­­­­­­­­­­­­­­­­­­­­­­­­­­­­­­­­­­­­­­­­­
­
­­­­­­­­­­­­­­­­­­­­­­­­­­­­­­­­­­­­­­­­­­­­­­­­­­­­­­­­­­­­­­­­­­­­­­­
­
51....................................
Information
511...................................
Publishing
Industries
(
except
Internet)
5111..................................
Newspaper,
Periodical,
Book,
and
Directory
Publishers
51111.................................
Newspaper
Publishers
51112.................................
Periodical
Publishers
51113.................................
Book
Publishers
51114.................................
Directory
and
Mailing
List
Publishers
51119.................................
Other
Publishers
5112..................................
Software
Publishers
51121.................................
Software
Publishers
512...................................
Motion
Picture
and
Sound
Recording
Industries
5121..................................
Motion
Picture
and
Video
Industries
51211.................................
Motion
Picture
and
Video
Production
51212.................................
Motion
Picture
and
Video
Distribution
51213.................................
Motion
Picture
and
Video
Exhibition
51219.................................
Postproduction
Services
and
Other
Motion
Picture
and
Video
Industries
5122..................................
Sound
Recording
Industries
51221.................................
Record
Production
51222.................................
Integrated
Record
Production/
Distribution
51223.................................
Music
Publishers
51224.................................
Sound
Recording
Studios
51229.................................
Other
Sound
Recording
Industries
515...................................
Broadcasting
(
except
Internet)
5151..................................
Radio
and
Television
Broadcasting
51511.................................
Radio
Broadcasting
51512.................................
Television
Broadcasting
5152..................................
Cable
and
Other
Subscription
Programming
51521.................................
Cable
and
Other
Subscription
Programming
516...................................
Internet
Publishing
and
Broadcasting
5161..................................
Internet
Publishing
and
Broadcasting
51611.................................
Internet
Publishing
and
Broadcasting
[[
Page
21248]]
517...................................
Telecommunications
5171..................................
Wired
Telecommunications
Carriers
51711.................................
Wired
Telecommunications
Carriers
5172..................................
Wireless
Telecommunications
Carriers
(
except
Satellite)
51721.................................
Wireless
Telecommunications
Carriers
(
except
Satellite)
5173..................................
Telecommunications
Resellers
51731.................................
Telecommunications
Resellers
5174..................................
Satellite
Telecommunications
51741.................................
Satellite
Telecommunications
5175..................................
Cable
and
Other
Program
Distribution
51751.................................
Cable
and
Other
Program
Distribution
5179..................................
Other
Telecommunications
51791.................................
Other
Telecommunications
518...................................
Internet
Service
Providers,
Web
Search
Portals,
and
Data
Processing
Services
5181..................................
Internet
Service
Providers
and
Web
Search
Portals
51811.................................
Internet
Service
Providers
and
Web
Search
Portals
5182..................................
Data
Processing,
Hosting,
and
Related
Services
51821.................................
Data
Processing,
Hosting,
and
Related
Services
519...................................
Other
Information
Services
5191..................................
Other
Information
Services
51911.................................
News
Syndicates
51912.................................
Libraries
and
Archives
51919.................................
All
Other
Information
Services
­­­­­­­­­­­­­­­­­­­­­­­­­­­­­­­­­­­­­­­­­­­­­­­­­­­­­­­­­­­­­­­­­­­­­­­
­

Draft
Classification
for
Information
Representatives
of
the
statistical
agencies
of
Canada,
Mexico,
and
the
United
States
provisionally
agree
to
a
draft
industrial
classification
for
the
Information
sector.
The
draft
classification
of
the
Information
sector
is
divided
into
subsectors
covering
Publishing
Industries
(
except
Internet);
Motion
Picture
and
Sound
Recording
Industries;
Broadcasting
(
except
Internet);
Internet
Publishing
and
Broadcasting;
Telecommunications;
Internet
Service
Providers,
Web
Search
Portals
and
Data
Processing;
and
Other
Information
Services.
These
subsectors
are
further
subdivided
into
16
four­
digit
industry
groups
and
30
five­
digit
industries.
The
Information
sector
comprises
establishments
primarily
engaged
in
(
a)
producing
and
distributing
cultural
information,
(
b)
providing
the
means
to
transmit
or
distribute
these
products
as
well
as
data
or
communications,
and
(
c)
processing
data.
Many
of
the
industries
in
the
NAICS
Information
sector
are
engaged
in
either
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
publishing
industries,
and
film
and
sound
industries.
Also
included
are
broadcasting
industries,
telecommunication
industries,
and
information
access
providers
and
processors
that
process
and
distribute
information
and
provide
access
to
facilities
for
transmission
of
information.
Although
many
new
industries
have
been
created
for
this
sector,
most
of
the
activities
it
contains
have
existed
for
some
time.
A
new
feature
of
the
revised
Information
Sector
is
the
inclusion
of
new
industries
for
activities
that
have
recently
appeared
in
the
economy
due
to
the
rapid
expansion
of
the
Internet.
When
NAICS
was
initially
conceived,
Internet
service
providers,
web
search
portals,
and
other
forms
of
Internet
distribution
of
content
were
in
their
infancy.
These
activities
are
now
separately
identified
in
the
classification.
The
following
paragraphs
provide
a
brief
description
of
the
individual
components
of
this
sector.
The
Publishing
Industries
(
except
Internet)
subsector
groups
establishments
engaged
in
the
publishing
of
newspapers,
periodicals,
and
books,
as
well
as
directory,
mailing
list,
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
or
in
electronic
copy
such
as
diskette
or
CD­
ROM.
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
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,
where
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
and
custom
design
of
software
to
client
specifications
remains
in
Professional,
Scientific,
and
Technical
Services.
These
distinctions
arise
because
of
the
different
ways
that
software
is
created,
reproduced,
and
distributed.
The
only
change
to
this
subsector
for
2002
is
the
new
title
for
Industry
51114
that
has
been
renamed
from
Database
and
Directory
Publishers
to
Directory
and
Mailing
List
Publishers.
This
new
title
and
an
updated
definition
better
describe
the
activities
included
in
this
industry.
The
Motion
Picture
and
Sound
Recording
Industries
subsector
groups
establishments
involved
in
producing
and
distributing
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
Industries
subsector.

[[
Page
21249]]

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,
Motion
Picture
and
Video
Exhibition,
Postproduction
Services,
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
classes
for
Record
Production
Companies,
Integrated
Record
Production/
Distribution,
Music
Publishers,
Sound
Recording
Studios,
and
Other
Sound
Recording
Industries.
Record
production
companies
are
primarily
engaged
in
searching
out,
identifying
and
contracting
artists
for
whom
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.
No
changes
were
made
to
this
subsector
for
2002.
In
NAICS
2002,
Telecommunications
and
Broadcasting
are
split
into
separate
subsectors.
This
structural
change
acknowledges
that
the
production
and
distribution
of
information
or
cultural
content
is
significantly
different
from
the
creation
of
the
infrastructure
used
in
distribution.
The
new
Broadcasting
(
except
Internet)
subsector,
NAICS
515,
distinguishes
between
radio
broadcasting,
television
broadcasting,
and
cable
and
other
subscription
programming.
These
industry
groups
are
based
on
differences
in
the
methods
of
communication
and
in
the
nature
of
services
provided.
Broadcasting
(
except
Internet)
includes
establishments
that
operate
broadcasting
studios
and
facilities
for
over
the
air,
cable,
or
satellite
delivery
of
audio
and
video
programming
such
as
music,
entertainment,
news,
talk,
and
the
like.
These
establishments
are
often
engaged
in
producing
and
purchasing
programs
and
generating
revenues
from
the
sale
of
time
to
advertisers,
and
from
donations,
subsidies,
and/
or
the
sale
of
programs.
Cable
and
Other
Subscription
Programming
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.
NAICS
2002
recognizes
for
the
first
time
the
significant
differences
between
traditional
publishing
and
broadcasting
and
similar
activities
using
the
Internet
in
a
new
subsector
for
Internet
Publishing
and
Broadcasting,
NAICS
516.
The
unique
combination
of
text,
audio,
video,
and
interactive
features
present
in
informational
or
cultural
products
on
the
Internet
justifies
the
creation
of
the
new
subsector.
NAICS
separates
Internet
Publishing
and
Broadcasting
in
order
to
identify
and
statistically
characterize
this
area
of
rapid
growth
in
the
economies
of
the
three
North
American
partners
in
NAICS.
The
new
Telecommunications
subsector,
NAICS
517,
is
primarily
engaged
in
operating,
maintaining,
and/
or
providing
access
to
facilities
for
transmitting
voice,
data,
text,
sound,
and
full
motion
picture
video
between
network
termination
points.
In
contrast
to
the
Broadcasting
subsector,
the
Telecommunications
subsector
generally
does
not
produce
information
or
cultural
content.
Telecommunications
includes
groupings
and
industries
based
on
the
technologies
used.
As
such,
there
are
separate
industry
groups
for
Wired
Telecommunications
Carriers,
Wireless
Telecommunications
Carriers
(
except
Satellite),
Telecommunications
Resellers,
Satellite
Telecommunications,
Cable
and
Other
Program
Distribution,
and
Other
Telecommunications.
All
of
these
industry
groups,
except
Telecommunications
Resellers,
operate
transmission
facilities
that
may
be
based
on
a
single
technology
or
a
combination
of
technologies.
The
Cable
and
Other
Program
Distribution
industry
group
includes
establishments
that
operate
cable
systems,
direct­
to­
home
satellite
systems,
or
other
similar
systems.
Another
new
subsector
in
NAICS
groups
establishments
that
provide
Internet
access;
Internet
search
services;
and
data
processing,
hosting,
and
related
services.
The
Internet
Service
Providers,
Web
Search
Portals,
and
Data
Processing
Services
subsector,
NAICS
518,
is
subdivided
into
two
industry
groups.
The
Internet
Service
Providers
and
Web
Search
Portals
industry
group
includes
establishments
that
provide
access
to
the
Internet
or
provide
the
means
to
search
for
information
on
the
Internet.
The
Data
Processing,
Hosting,
and
Related
Services
industry
group
includes
establishments
that
process
data
for
others.
Mainframe
computer
time­
share
facilities
and
web
hosting
establishments
are
included
with
Data
Processing,
Hosting,
and
Related
Services.
The
final
subsector,
Other
Information
Services,
NAICS
519,
provides
a
classification
for
other
information
providers,
such
as
news
syndicates,
as
well
as
repositories
of
information
products
in
the
form
of
libraries
and
archives.
Libraries
and
archives
provide
access
to
information
products
stored
in
their
physical
facilities.
Museums,
however,
are
classified
in
sector
71,
Arts,
Entertainment,
and
Recreation.

Section
C­­
NAICS
United
States­­
Wholesale
Trade
Representatives
of
the
statistical
agencies
of
Canada,
Mexico,
and
the
United
States
conducted
extensive
discussions
on
the
content
and
conceptual
structuring
of
industries
for
wholesale
trade
of
goods.
Due
to
the
complexity
of
this
dynamic
sector
and
structural
differences
among
the
three
countries,
no
additional
three­
country
comparability
was
obtained
for
wholesale
trade.
Canada,
Mexico,
and
the
United
States
agree
on
the
overall
content
of
Wholesale
Trade
but
will
retain
unique
national
industry
detail
within
the
sector.
However,
the
United
States
has
taken
the
insights
gained
from
these
discussions
and
incorporated
them
into
a
new
national
structure
for
Wholesale
Trade.
As
in
the
1997
NAICS
United
States
there
are
two
main
types
of
wholesalers
included
in
Wholesale
Trade
for
the
2002
NAICS
United
States:
those
that
sell
goods
on
their
own
account
and
those
that
arrange
sales
and
purchases
for
others
for
a
commission
or
fee.
(
1)
Establishments
that
sell
goods
on
their
own
account
are
known
as
wholesale
merchants,
distributors,
jobbers,
drop
shippers,
import/
export
merchants,
and
sales
branches.
These
establishments
typically
take
title
to
the
goods
being
sold
and
maintain
their
own
warehouse,
where
they
receive
and
[[
Page
21250]]

handle
goods
for
their
customers.
Goods
are
generally
sold
without
transformation,
but
may
include
integral
functions,
such
as
sorting,
packaging,
labeling,
and
other
marketing
services.
Throughout
this
notice,
these
establishments
are
referred
to
as
merchant
wholesalers.
(
2)
Establishments
arranging
for
the
purchase
or
sale
of
goods
owned
by
others
or
the
purchase
of
goods
on
a
commission
basis
are
known
as
agents
and
brokers,
commission
merchants,
import/
export
agents
and
brokers,
auction
companies,
and
manufacturer's
representatives.
These
establishments
do
not
take
title
to
the
goods
being
sold.
Throughout
this
notice,
these
establishments
are
referred
to
as
business
to
business
electronic
markets
and
agents
and
brokers.
Sector
42,
Wholesale
Trade,
would
be
divided
into
three
subsectors
in
the
United
States:
subsector
423,
Merchant
Wholesalers,
Durable
Goods;
subsector
424,
Merchant
Wholesalers,
Nondurable
Goods;
and
subsector
425,
Wholesale
Electronic
Markets
and
Agents
and
Brokers.
Each
of
these
subsectors
is
further
divided
into
industry
groups
and
industries
to
meet
the
detailed
needs
of
the
U.
S.
statistical
community.
Subsector
423,
Merchant
Wholesalers,
Durable
Goods,
is
split
into
nine
industry
groups
that
follow
the
structure
of
NAICS
1997.
These
industry
groups
are
further
divided
into
thirty­
seven
national
level
industries.
The
key
difference
between
the
content
of
subsector
421,
Wholesale
Trade,
Durable
Goods
in
1997
and
subsector
423,
Merchant
Wholesalers,
Durable
Goods,
is
the
exclusion
of
electronic
markets,
and
agents,
brokers,
and
other
intermediaries
that
do
not
take
title
to
the
goods
being
sold
in
subsector
423.
Merchant
wholesalers
in
NAICS
2002
are
defined
to
include
those
establishments
that
buy
or
sell
goods
on
their
own
account.
Included
are
wholesale
merchants,
distributors,
jobbers,
drop
shippers,
import/
export
merchants,
and
manufacturer's
sales
branches.
The
key
characteristic
of
wholesale
establishments
included
in
subsector
423
is
ownership
of
the
goods
that
are
being
sold.
Subsector
424,
Merchant
Wholesalers,
Nondurable
Goods,
mirrors
the
structure
of
NAICS
1997
subsector
422,
Wholesale
Trade,
Nondurable
Goods.
Again,
the
significant
difference
is
the
exclusion
of
electronic
markets,
and
agents
and
brokers
and
other
intermediaries
that
do
not
take
title
to
the
goods
being
sold.
Subsector
424
is
split
into
nine
industry
groups
that
are
further
divided
into
thirty­
two
national
level
industries
classifying
merchant
wholesalers
of
nondurable
goods.
Subsector
425,
Wholesale
Electronic
Markets
and
Agents
and
Brokers
is
a
new
subsector
for
NAICS
United
States
2002.
Establishments
in
the
Wholesale
Electronic
Markets
and
Agents
and
Brokers
subsector
arrange
for
the
sale
of
goods
owned
by
others
on
a
fee
or
commission
basis.
These
establishments,
unlike
those
in
subsectors
423,
do
not
take
title
to
the
goods
being
sold.
They
are
acting
on
behalf
of
the
buyers
and
sellers
of
goods.
This
subsector
is
being
created
to
classify
agents
and
brokers
as
well
as
electronic
markets
that
facilitate
wholesale
trade.
Over
the
past
two
years,
the
explosive
growth
of
wholesale
trade
on
the
Internet
has
radically
changed
the
role
of
agents
and
brokers
and
greatly
expanded
potential
markets
for
suppliers.
While
a
wholesale
trade
business
was
previously
constrained
by
geography
and
the
cost
of
initiating
contact
with
potential
customers,
the
Internet
has
created
inexpensive,
efficient
national
markets
for
suppliers.
The
United
States
proposal
for
subsector
425,
therefore,
creates
a
new
national
industry
for
these
electronic
markets
in
wholesale
trade,
separate
from
the
more
traditional
agents
and
brokers.
The
outsourcing
of
storage,
transportation,
finance,
and
other
traditional
wholesale
trade
functions
is
immensely
eased
with
the
advent
of
these
new
national
electronic
wholesale
markets.
In
order
to
gather
data
to
better
understand
these
changes
in
the
context
of
all
distributive
trade
industries,
they
will
be
separately
identified
and
categorized
in
NAICS
United
States
2002.
NAICS
United
States
1997
included
69
separate
national
industries
in
Wholesale
Trade.
NAICS
United
States
2002,
includes
71
national
industries
in
Wholesale
Trade.
With
the
addition
of
only
two
national
industries,
the
restructuring
of
Wholesale
Trade
creates
more
homogeneous
statistical
data
for
users,
eases
the
burden
of
code
assignment
for
sales
representatives
and
wholesale
trade
brokers,
and
separately
identifies
emerging
trends
for
study
and
analysis.
Although
additional
international
comparability
was
not
obtained,
the
changes
to
Sector
42,
Wholesale
Trade,
in
the
United
States
represent
a
major
improvement
in
the
statistics
generated
for
wholesale
trade
using
NAICS.
These
changes
also
position
the
United
States
to
measure
and
analyze
more
completely
all
distributive
trade
industries
during
future
NAICS
revisions.
The
entire
proposed
structure
for
Wholesale
Trade
is
detailed
in
Part
IV
of
this
notice.
BILLING
CODE
3110­
01­
P