March 1, 2011 (Previous notice)
The North American Classification System (NAICS) is a system for classifying production units by type of economic activity. It was developed by the statistical agencies of Canada, Mexico and the United States in order to facilitate the collection, tabulation, analysis and dissemination of industry statistics and allow three-country uniformity and comparability of such data. NAICS is also widely used by government agencies, trade associations, public and private sector businesses and various other organizations.
- Purpose and use of this notice
- Background
- Criteria for creating new classes or updating current classes
- Timeline for the 2012 NAICS revision process
- Consultation results
Purpose and use of this notice
This notice is intended to provide interested parties with an update about the status of NAICS 2012, principally a summary of NAICS provisional changes for 2012. The decisions presented here are not exhaustive in every detail. This document serves to notify users of the changes at a high level.
Background
The first version of NAICS was created for the 1997 reference year. The three countries agreed upon the conceptual framework of the new system and the principles upon which NAICS was to be developed.
- NAICS would be based on a production-oriented or supply-based conceptual framework. This means that producing units using similar production processes would be grouped together in NAICS.
- Special attention would be given to developing production-oriented classifications for (a) new and emerging industries (b) services industries in general and (c) industries engaged in the production of advanced technologies.
- Time-series continuity would be maintained to the extent possible. However, changes in the economy and proposals from data users would be considered. In addition, in order to create a common system for all three countries, adjustments would be made where the United States, Canada and Mexico had incompatible definitions.
- In the interest of a wider range of international comparisons, the three countries would strive for greater compatibility with the two-digit level of the International Standard Industrial Classification of All Economic Activities (ISIC Revision 4).
Criteria for creating new classes or updating current classes
NAICS is revised every five years. In the current revision for 2012, Statistics Canada remained committed to maintaining the founding principles of NAICS. Over and above these founding principles, the call for proposals also specified that classes should respect the basic classification principles of mutual exclusivity, exhaustiveness, and homogeneity of classes, be empirically significant (gross revenues of $500 million) and be relevant (be of analytical interest and result in data useful to users).
Timeline for the 2012 NAICS revision process
A public consultation was launched on Statistics Canada's website on July 3rd, 2008 through a call for proposals for changes to the 2007 NAICS version. The deadline for receipt of proposals was September 30th, 2009.
The review of the proposals and consultations within Statistics Canada and with our Mexican and American counterparts were undertaken throughout 2008 and into 2009. NAICS revisions for 2012 were finalized in January 2011.
Work on NAICS 2012 will continue in 2011. Release of the final NAICS 2012 manual will be in December 2011.
Consultation results
In response to the online call for revision proposals, and as a result of consultation within Statistics Canada and with our American and Mexican partners, various kinds of changes will be brought into NAICS for 2012. Among the most notable changes are changes relating to outsourcing of manufacturing production, video game developers, book publishing exclusive agents and crafts. Many changes involve clarification of the definition and boundary of classes through:
- changes to the descriptive text of the definition that clarifies it but does not change the scope of the industry
- changes to the illustrative examples
- changes to the exclusions
- changes to the titles of industries
Some changes involve the reduction of detail, while other industries were detailed further. Several other changes involved code numbering changes, by pushing 5-digit detail down to the 6-digit level, with otherwise no changes. This was done to keep the NAICS coding consistent at the trilateral level.
Outsourcing of manufacturing
The treatment of factoryless goods producers (FGPs) - units that outsource the transformation process for manufactured goods - will be clarified for NAICS 2012. The activities of FGPs will be classified to manufacturing if the units own the inputs to production. Otherwise the units will be classified to wholesale trade. The sector definitions for 31-33 Manufacturing and 41 Wholesale Trade will be updated to clarify the classification of FGPs in NAICS Canada 2012, and implementation guidelines are being developed. This treatment is consistent with the ISIC Rev. 4 treatment of factoryless goods producers.
Video game publishers and developers
Two new 6-digit industries will be created to cover the video game developers industries. One of these will be under 51121 Software Publishers, while the other will be under 54151 Computer Systems Design and Related Services. See table 2 for details.
Book publishing and exclusive agents
Exclusive agents are a concept particular to the Canadian book publishing industry. Exclusive agents will be classified from 414420 Book, Periodical and Newspaper Wholesaler-Distributors and into 511130 Book Publishers.
Crafts
Artisans currently classified in manufacturing will be classified to 711511 Independent Artists, Visual Arts.
Own-account mineral exploration
Own-account mineral exploration activities will be classified under the mining industries, 212 Mining and Quarrying (except Oil and Gas), rather than support activities, 213 Support Activities for Mining and Oil and Gas Extraction.
Changes to descriptive text
There are numerous cases where revision requests resulted in changes to the descriptive text of various classes. These changes include:
- clarification of the treatment of transporting timber on own-account in 113310 Logging
- clarification of the description for 321114 Wood Preservation
- revision of the description for sector 41 Wholesale Trade to clarify the treatment of manufacturers' sales offices and branches
- modification of the text for 488519 Other Freight Transportation Arrangement to clarify the treatment of establishments providing logistics services
- clarification of the treatment of distribution centres in the industry group 4931 Warehousing and Storage
- revision of the text for 541430 Graphic Design Services to explicitly include website designers
- revision of the definition for 551114 Head Offices to include greater detail for the description of this industry
- revision of the text for 711513 Independent Writers and Authors to clarify that this industry includes trade and technical writers, in addition to writers creating artistic or literary works
- revision of the text for 722511 Full-service restaurants to specify the inclusion of drinking places that derive the majority of their revenues from serving food
Changes to illustrative examples
The NAICS definitions are usually supported by examples and exclusions. Some of the proposals for NAICS revisions resulted in changes to illustrative examples, including:
- creating an example for firestop contractors in 238310 Drywall and Insulation Contractors
- moving the example for wood cabinet manufacturing from 337123 Other Wood Household Furniture Manufacturing to 321990 All Other Wood Product Manufacturing
- moving digital cameras manufacturing from 334110 Computer and peripheral equipment manufacturing to 333310 Commercial and Service Industry Machinery Manufacturing
- creating new examples for consulting services under 5416 Management, Scientific and Technical Consulting Services
- moving the example "Race horse trainers" from 711218 Other Spectator Sports to 711213 Horse Race Tracks.
Changes to exclusions
A number of changes to exclusions were made, of which additions of exclusions to clarify:
- 541310 Architectural Services
- 112510 Aquaculture
- 541690 Other Scientific and Technical Consulting Services.
Title changes
The Table 1, below, contains a list of title changes for NAICS 2012 classes. More French titles have been modified as a result of translation improvements.
In addition to the changes in the table, there is a change that affects almost all classes, from the 3-digit to the 6-digit level, under sector 41 Wholesale Trade. For brevity sake these changes are summarized here, rather than being reported in detail in the table. In NAICS 2007, these industries are known as Wholesaler-Distributors. In NAICS 2012, the term Wholesaler-Distributors will be replaced with merchant wholesaler. For example, 416120 Plumbing, Heating and Air-Conditioning Equipment and Supplies Wholesaler-Distributors will be replaced with 416120 Plumbing, heating and air-conditioning equipment and supplies merchant wholesalers.
Table 1
Title changes
The table 1, below, contains a list of title changes for NAICS 2012 classes. More French titles have been modified as a result of translation improvements.
Petroleum Product Wholesaler - Distributors Petroleum and petroleum products merchant wholesalers
| CODE | NAICS 2007 Title | NAICS 2012 Title |
|---|---|---|
| 112 | Animal Production | Animal production and aquaculture |
| 212 | Mining and Quarrying (except Oil and Gas) | Mining and quarrying (except oil and gas extraction) |
| 412 | Petroleum Product Wholesaler - Distributors | Petroleum and petroleum products merchant wholesalers |
| 4121 | Petroleum Product Wholesaler - Distributors | Petroleum and petroleum products merchant wholesalers |
| 41211 | Petroleum Product Wholesaler - Distributors | Petroleum and petroleum products merchant wholesalers |
| 412110 | Petroleum Product Wholesaler - Distributors | Petroleum and petroleum products merchant wholesalers |
| 41445 | Video Cassette Wholesalers | Video recording merchant wholesalers |
| 414450 | Video Cassette Wholesalers | Video recording merchant wholesalers |
| 415 | Motor Vehicle and Parts Wholesaler-Distributors | Motor vehicle and motor vehicle parts and accessories merchant wholesalers |
| 41892 | Mineral, Ore and Precious Metal Wholesaler-Distributors | Mineral, ore, precious metal, and precious stones merchant wholesalers |
| 418920 | Mineral, Ore and Precious Metal Wholesaler-Distributors | Mineral, ore, precious metal, and precious stones merchant wholesalers |
| 45291 | Warehouse Clubs and Superstores | Warehouse clubs |
| 452910 | Warehouse Clubs and Superstores | Warehouse clubs |
Other changes
Revisions that resulted in the reduction of detail through the merging of classes or in greater detail through the splitting of classes as well as in code renumbering are shown in Table 2.
Table 2
Merges, splits and code renumbering at the 6-digit level
** S – same class but with new number or title
SP – splitting of classes
M – merging of classes
Revisions that resulted in the reduction of detail through the merging of classes or in greater detail through the splitting of classes as well as in code renumbering are shown in table 2.
| 2007 NAICS code | 2007 NAICS description | Status** | 2012 NAICS code | 2012 NAICS description |
|---|---|---|---|---|
| 311320 | Chocolate and Confectionery Manufacturing from Cacao Beans | S | 311351 | Chocolate and chocolate confectionery manufacturing from cacao beans |
| 311330 | Confectionery Manufacturing from Purchased Chocolate | S | 311352 | Confectionery manufacturing from purchased chocolate |
| 311822 | Flour Mixes and Dough Manufacturing from Purchased Flour | M | 311824 | Flour mixes, dough, and pasta manufacturing from purchased flour |
| 311823 | Dry Pasta Manufacturing | M | 311824 | Flour mixes, dough, and pasta manufacturing from purchased flour |
| 315221 | Men's and Boys' Cut and Sew Underwear and Nightwear Manufacturing | M | 315220 | Men's and boys' cut and sew clothing manufacturing |
| 315222 | Men's and Boys' Cut and Sew Suit, Coat and Overcoat Manufacturing | M | 315220 | Men's and boys' cut and sew clothing manufacturing |
| 315226 | Men's and Boys' Cut and Sew Shirt Manufacturing | M | 315220 | Men's and boys' cut and sew clothing manufacturing |
| 315227 | Men's and Boys' Cut and Sew Trouser, Slack and Jean Manufacturing | M | 315220 | Men's and boys' cut and sew clothing manufacturing |
| 315229 | Other Men's and Boys' Cut and Sew Clothing Manufacturing | M | 315220 | Men's and boys' cut and sew clothing manufacturing |
| 315231 | Women's and Girls' Cut and Sew Lingerie, Loungewear and Nightwear Manufacturing | M | 315249 | Women's and girls' cut and sew clothing manufacturing |
| 315232 | Women's and Girls' Cut and Sew Blouse and Shirt Manufacturing | M | 315249 | Women's and girls' cut and sew clothing manufacturing |
| 315233 | Women's and Girls' Cut and Sew Dress Manufacturing | M | 315249 | Women's and girls' cut and sew clothing manufacturing |
| 315234 | Women's and Girls' Cut and Sew Suit, Coat, Tailored Jacket and Skirt Manufacturing | M | 315249 | Women's and girls' cut and sew clothing manufacturing |
| 315239 | Other Women's and Girls' Cut and Sew Clothing Manufacturing | M | 315249 | Women's and girls' cut and sew clothing manufacturing |
| 315291 | Infants' Cut and Sew Clothing Manufacturing | S | 315241 | Infants' cut and sew clothing manufacturing |
| 315292 | Fur and Leather Clothing Manufacturing | S | 315281 | Fur and leather clothing manufacturing |
| 315299 | All Other Cut and Sew Clothing Manufacturing | S | 315289 | All other cut and sew clothing manufacturing |
| 333210 | Sawmill and Woodworking Machinery Manufacturing | S | 333245 | Sawmill and woodworking machinery manufacturing |
| 333220 | Rubber and Plastics Industry Machinery Manufacturing | S | 333246 | Rubber and plastics industry machinery manufacturing |
| 333291 | Paper Industry Machinery Manufacturing | S | 333247 | Paper industry machinery manufacturing |
| 333299 | All Other Industrial Machinery Manufacturing | S | 333248 | All other industrial machinery manufacturing |
| 443110 | Appliance, Television and Other Electronics Stores | S | 443143 | Appliance, television and other electronics stores |
| 443120 | Computer and Software Stores | S | 443144 | Computer and software stores |
| 443130 | Camera and Photographic Supplies Stores | S | 443145 | Camera and photographic supplies stores |
| 451110 | Sporting Goods Stores | SP | 451111 | Golf equipment and supplies specialty stores |
| SP | 451112 | Ski equipment and supplies specialty stores | ||
| SP | 451113 | Cycling equipment and supplies specialty stores | ||
| SP | 451119 | All other sporting goods stores | ||
| 451210 | Book Stores and News Dealers | S | 451310 | Book stores and news dealers |
| 451220 | Pre-Recorded Tape, Compact Disc and Record Stores | S | 443146 | Pre-Recorded Tape, Compact Disc and Record Stores |
| 454111 | Internet Shopping | M | 454110 | Electronic shopping and mail-order houses |
| 454112 | Electronic Shopping | M | 454110 | Electronic shopping and mail-order houses |
| 454113 | Mail-Order Houses | M | 454110 | Electronic shopping and mail-order houses |
| 511210 | Software Publishers | SP | 511211 | Software publishers, except video game publishers |
| SP | 511212 | Video game publishers | ||
| 541510 | Computer Systems Design and Related Services | SP | 541514 | Computer systems design and related services, except video game developers |
| SP | 541515 | Video game developers | ||
| 722110 | Full-Service Restaurants | S | 722511 | Full-service restaurants |
| 722210 | Limited-Service Eating Places | S | 722512 | Limited-service eating places |
Unsuccessful proposals
In addition, many proposals for changes to NAICS 2007 did not result in revisions. These cases fell under a number of categories, including:
- proposals that were best satisfied with product coding rather than industry coding
- proposals that did not meet the requirements for new industries
- proposals on which trilateral agreement could not be reached
- proposals that were withdrawn by the originators
Product and technology classifications
Some of the proposals for NAICS 2012 revisions did not meet the criteria for industry coding. Rather, they were requests for classification of products or technologies. These revisions are best dealt with through the North American Products Classification System (NAPCS), or some technology classification.
No trilateral agreement
Several proposals were discussed with representatives of the statistical agencies of the United States and Mexico, but failed to gain trilateral support (i.e., agreement among the three NAICS partner countries).
Failed to meet requirements of new or revised industries
A number of proposals for new or revised NAICS industries were discussed within Statistics Canada and were rejected on the grounds that they did not meet the requirements of industry classification. The specific failure may also be related to a structural problem with the proposal, or a lack of agreement among all interested parties.
Withdrawn by sponsors
Numerous proposals were withdrawn by their sponsors. In most cases, they were withdrawn following discussions between classification specialists and subject matter specialists, on the grounds that they did not meet the requirements of good industrial classification; or upon investigation of the proposals, it was determined that they would not meet the goals of the sponsor.
Questions regarding NAICS changes for 2012
Please direct any questions regarding the contents of this document, or any NAICS 2012 changes to standards-normes@statcan.gc.ca.