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November 2004, Vol. 127, No.11
Industry productivity trends under the North American Industry Classification system
Matthew Russell, Paul Takac, and Lisa Usher
The Bureau of Labor Statistics has recently completed converting its industry labor productivity measures to the North American Industry Classification System (NAICS).1 The conversion mirrors efforts of the entire U.S. statistical system to more closely reflect the Nation’s changing economy by better identifying service industries and new and emerging industries. This article describes the conversion effects on the industry productivity data, focusing on industry structure and data availability, and the resulting trends in industry labor productivity and related measures.
NAICS replaces the existing Standard Industrial Classification (SIC) system that had been in use since the 1930s.2 While the SIC system was revised periodically over the years to reflect changes in the economy’s industrial composition, its structure remained the same as first established in the 1930s. The focus remained on the goods-producing industries, particularly those in the manufacturing sector, which was prominent when the SIC was first introduced. The most recent major revision to the SIC occurred in 1987, and rapid changes since then in both the U.S. and world economies necessitated additional changes by the mid 1990s. The adoption of the North American Free Trade Agreement in 1994 highlighted the need for cooperation between the United States, Canada, and Mexico. The NAICS classification system was developed as a cooperative effort by the statistical agencies of these countries during the mid 1990s. The goal was to provide an improved industry classification system that would offer common industry definitions based on a unified economic concept for the three countries—and which would give special attention to service industries and to new, emerging, and advanced-technology industries.
This excerpt is from an article published in the November 2004 issue of the Monthly Labor Review. The full text of the article is available in Adobe Acrobat's Portable Document Format (PDF). See How to view a PDF file for more information.
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1 Productivity and cost measures for 180 mainly four-digit NAICS industries were first released on September 18, 2003. Since that time the Bureau has revised and updated the measures for many industries and added measures for more than 300 additional industries at the six-, five-, three-, and two-digit NAICS level.
2 Executive Office of the President (1998), North American Industry Classification System, United States, 2002, Washington, DC, U.S. Office of Management and Budget. Copies of the manual can be obtained from the National Technical Information Service (NTIS) on the Internet at www.ntis.gov/products/bestsellers/naics.asp. For more information about the NAICS structure, see the Bureau of the Census on the Internet at http://www.census.gov/epcd/www/naics.html.
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