[Federal Register Volume 63, Number 149 (Tuesday, August 4, 1998)]
[Notices]
[Pages 41696-41700]
From the Federal Register Online via the Government Publishing Office [www.gpo.gov]
[FR Doc No: 98-20689]



[[Page 41695]]

_______________________________________________________________________

Part V





Office of Management and Budget





_______________________________________________________________________



1997 North American Industry Classification System (NAICS) Update and 
Official U.S. Reference NAICS Implementation Manual Availability; 
Notice

  Federal Register / Vol. 63, No. 149 / Tuesday, August 4, 1998 / 
Notices  

[[Page 41696]]



OFFICE OF MANAGEMENT AND BUDGET


1997 North American Industry Classification System--1987 Standard 
Industrial Classification Replacement

AGENCY: Office of Management and Budget, Executive Office of the 
President.

ACTION: Notice of update to the North American Industry Classification 
System (NAICS).

-----------------------------------------------------------------------

SUMMARY: This notice updates the structure and the concordance tables 
of the North American Industry Classification System (NAICS) that were 
published by the Office of Management and Budget in an April 9, 1997, 
Federal Register notice and announces the availability of the official 
U.S. reference manual for implementing NAICS United States in both 
printed and electronic versions from the National Technical Information 
Service. This update is the result of numerous meetings among Canada, 
Mexico, and the United States that were held to complete the written 
descriptions for NAICS and assign a list of 35,000 activity items to 
the correct NAICS industry. The assignment of the activity items 
resulted in some changes to the NAICS tables as published in the April 
9, 1997, Federal Register notice. These changes are highlighted in the 
Supplementary Information section of the notice.
    NAICS is a new economic classification system that replaces the 
1987 Standard Industrial Classification (SIC) for statistical purposes. 
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. 
NAICS will be used by Federal statistical agencies that collect or 
publish data by industry. It is also expected to be widely used by 
State agencies, trade associations, private businesses, and other 
organizations.
    The Instituto Nacional de Estadistica, Geografia e Informatica 
(INEGI) of Mexico, Statistics Canada, and the United States Office of 
Management and Budget (OMB), through its Economic Classification Policy 
Committee (ECPC), have 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. The fresh view of establishment data that this 
restructuring will provide should engender insights into the 
increasingly interrelated evolution of our economies. NAICS also 
reflects in a much more explicit way the enormous changes in technology 
and in the growth and diversification of services that have marked 
recent decades. Industry statistics presented using NAICS will also be 
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 will provide 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 differing national economic and institutional structures as 
well as limited resources and time for constructing NAICS, the NAICS 
structure has not been made entirely comparable at the individual 
industry level across all three countries. For some sectors and 
subsectors, the statistical agencies of the three countries have agreed 
to harmonize NAICS based on sectoral boundaries rather than on a 
detailed industry structure. The sectors that are not comparable at the 
detailed industry level are: utilities; construction; wholesale trade; 
retail trade; finance and insurance; and public administration. The 
subsectors that are not comparable at the detailed industry level are: 
real estate; waste management and remediation services; as well as 
other services including personal and laundry services, and religious, 
grantmaking, civic, and professional and similar organizations. 
Separate agreements providing for detailed industry comparability 
between Canada and the United States were reached for the utilities; 
retail trade; and finance and insurance sectors. To distinguish the 
three countries' versions of NAICS, they are called NAICS Canada, NAICS 
Mexico (SCIAN Mexico, in Spanish), and NAICS United States.
    In developing NAICS United States, OMB has published a total of 
eight previous Federal Register notices advising the public of the work 
of the ECPC and seeking comment on that work. The March 31, 1993, 
Federal Register notice (58 FR 16990-17004) announced OMB's intention 
to revise the SIC for 1997, the establishment of the Economic 
Classification Policy Committee, and the process for revising the SIC. 
The July 26, 1994, Federal Register notice (59 FR 38092-38096) set 
forth the concepts for the new system and the decision to develop NAICS 
in cooperation with Statistics Canada and INEGI. That notice also 
included a request for the public to submit recommendations for the 
industries to be included in the new system. The deadline for 
submitting proposals for new or revised industries was November 7, 
1994.
    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 INEGI and Statistics Canada, an industrial 
structure that would apply to all three North American countries was 
developed as NAICS. A series of five Federal Register notices sought 
comment on the structure of the system. These notices are described in 
more detail in the Supplementary Information section below. The last 
Federal Register notice, published on April 9, 1997, announced OMB's 
decision to adopt NAICS and presented the final structure. This notice 
adjusts that final structure as presented in the Supplementary 
Information section below.

EFFECTIVE DATE: Federal statistical data published for reference years 
beginning on or after January 1, 1997, will be published using the new 
NAICS United States codes as modified by this notice. NAICS is 
scheduled to go into effect for Federal statistical purposes for 
reference year 1997 in Canada and the United States, and 1998 in 
Mexico. Publication of the 1997 NAICS United States Manual is planned 
for June 1998. Use of NAICS for nonstatistical purposes (e.g., 
administrative, regulatory, or taxation) will be determined by the 
agency or agencies that have chosen to use the SIC for nonstatistical 
purposes. Readers interested in the effective dates for the use of 
NAICS for nonstatistical purposes should contact the relevant agency to 
determine its plans, if any, for a transition from use of the SIC to 
NAICS.

ADDRESSES: Please send correspondence about these updates to: Katherine 
K. Wallman, Chief Statistician, Office of Management and Budget, 10201 
New Executive Office Building, 725 17th Street, NW, Washington, DC 
20503, telephone number: (202) 395-3093, FAX number: (202) 395-7245.
    Electronic Availability and Correspondence: This document is 
available on the Internet from the Census Bureau Internet site via WWW 
browser, ftp, and E-mail. To obtain this document via WWW browser, 
connect

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to ``http://www.census.gov'' then select ``Subjects A to Z,'' then 
select ``N,'' then select ``NAICS (North American Industry 
Classification System).'' This WWW page contains previous NAICS United 
States Federal Register notices and related documents as well.
    To obtain this document via ftp, log into ftp.census.gov as 
anonymous, and retrieve the files ``naicsfr9.pdf,'' 
``naicsfr9tbl1.pdf,'' and ``naicsfr9tbl2.pdf'' from the ``/pub/epcd/
naics'' directory. (That directory also contains previous NAICS United 
States Federal Register notices and related documents.) To obtain this 
document via Internet E-mail, send a message to [email protected] 
with the body text as follows: ``get gatekeeper naics.txt''. 
Instructions for obtaining this and other NAICS United States documents 
will be delivered as a message attachment.
    Correspondence may be sent via Internet E-mail to OMB at 
[email protected] (do not include any capital letters in the address).

FOR FURTHER INFORMATION CONTACT: Paul Bugg, 10201 New Executive Office 
Bldg., Washington, D.C. 20503, E-mail address: [email protected], 
telephone number: (202) 395-3093, FAX number: (202) 395-7245. Inquiries 
about the content of industries or requests for electronic copies of 
the tables should be made to Carole Ambler, Chair, Economic 
Classification Policy Committee, Bureau of the Census, Room 2633-3, 
Washington, D.C. 20233, E-mail address: [email protected], 
telephone number: (301) 457-2668, FAX number: (301) 457-1343.

SUPPLEMENTARY INFORMATION:

NAICS Update

    The structure of NAICS was developed in a series of meetings among 
the three countries. 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 NAICS.
    As groups of subsectors of NAICS were completed and agreed upon by 
the three countries, the ECPC published the proposed industries for 
those subsectors for public comment in the Federal Register. Five 
successive Federal Register notices were published asking for comment. 
A first notice published in the Federal Register, July 26, 1995 (60 FR 
38436-38452), requested comment on proposed industry structures for 
petroleum and coal product manufacturing, chemical manufacturing, and 
rubber and plastics manufacturing; for broadcasting and 
telecommunications; and for food services and drinking places and 
accommodations. A second Federal Register notice published on February 
6, 1996 (61 FR 4524-4578), requested comment on proposed industry 
structures for crop production, animal production, forestry and 
logging; textile mills, textile product mills, apparel manufacturing, 
and leather and allied product manufacturing; food manufacturing and 
beverage and tobacco product manufacturing; fabricated metal product 
manufacturing; machinery manufacturing; electrical equipment, appliance 
and component manufacturing; and transportation equipment 
manufacturing. A third Federal Register notice published on May 28, 
1996 (61 FR 26558-26668), requested comment on proposed industry 
structures for health and social assistance; educational services; 
computers and electronics product manufacturing; furniture 
manufacturing; printing and related support activities; professional, 
technical and scientific services; performing arts, spectator sports 
and related industries; museums, historical sites and similar 
institutions; recreation, amusement and gambling; information; wood 
product manufacturing, except furniture; rental and leasing; repair and 
maintenance; management and support; transportation; mining; paper 
manufacturing; nonmetallic minerals manufacturing; primary metal 
manufacturing; miscellaneous manufacturing; and postal service and 
couriers. A fourth Federal Register notice published on July 5, 1996 
(61 FR 35384-35515), requested comment on proposed industry structures 
for finance and insurance; wholesale trade; retail trade; construction; 
utilities; waste management and remediation services; real estate; 
lessors of other nonfinancial assets; personal and laundry services; 
and religious, grant making, civic, and other membership organizations. 
That notice also requested comments on the proposed hierarchy and 
coding system for NAICS. Finally, a fifth Federal Register notice 
published on November 5, 1996 (61 FR 57006-57183), announced the ECPC's 
final recommendations to OMB for the complete structure of NAICS United 
States, including the hierarchy and coding system, and asked for public 
comments. Final comments were due on December 20, 1996. Changes 
incorporated into the new system based on comments in response to the 
November 5, 1996, notice were presented in a sixth Federal Register 
notice containing OMB's final decisions, published on April 9, 1997 (62 
FR 17288-17478).
    Based on continuing meetings with Canada and Mexico, some changes 
have been made to the NAICS structure that was published in the April 
9, 1997, Federal Register notice. Most of these changes are the result 
of an intensive review of 35,000 activity items compiled by the 
statistical agencies of the three countries. As a result of that 
review, both the structure of NAICS and some subsector and industry 
titles have been changed to better describe the activity or to ensure 
that the titles among the three countries are comparable. In a few 
cases, activity items have been moved from one NAICS code (as published 
in the April 9, 1997, Federal Register notice) to another. The title 
changes and structural changes are shown below. Complete links between 
the 1997 NAICS and the 1987 SIC incorporating these changes are now 
shown in tables that are available on the Census Bureau NAICS web site 
at <http://www.census.gov/epcd/www/naicstab.htm>.

Title Changes

------------------------------------------------------------------------
     NAICS code            Original title               New title       
------------------------------------------------------------------------
2123................  Non-Metallic Mineral      Nonmetallic Mineral     
                       Mining and Quarrying.     Mining and Quarrying.  
21239...............  Other Non-Metallic        Other Nonmetallic       
                       Mineral Mining and        Mineral Mining and     
                       Quarrying.                Quarrying.             
212399..............  All Other Non-Metallic    All Other Nonmetallic   
                       Mineral Mining.           Mineral Mining.        
213115..............  Support Activities for    Support Activities for  
                       Non-Metallic Minerals     Nonmetallic Minerals   
                       (except Fuels).           (except Fuels).        
311813..............  Frozen Bakery Product     Frozen Cakes, Pies, and 
                       Manufacturing.            Other Pastries         
                                                 Manufacturing.         
311823..............  Pasta Manufacturing.....  Dry Pasta Manufacturing.
315212..............  Women's and Girls' Cut    Women's, Girls'', and   
                       and Sew Apparel           Infants' Cut and Sew   
                       Contractors.              Apparel Contractors.   
32513...............  Dye and Pigment           Synthetic Dye and       
                       Manufacturing.            Pigment Manufacturing. 

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325132..............  Organic Dye and Pigment   Synthetic Organic Dye   
                       Manufacturing.            and Pigment            
                                                 Manufacturing.         
3255................  Paint, Coating, Adhesive  Paint, Coating, and     
                       and Sealant               Adhesive Manufacturing.
                       Manufacturing.                                   
32599...............  All Other Chemical        All Other Chemical      
                       Product Manufacturing.    Product and Preparation
                                                 Manufacturing.         
325998..............  All Other Miscellaneous   All Other Miscellaneous 
                       Chemical Product          Chemical Product and   
                       Manufacturing.            Preparation            
                                                 Manufacturing.         
327111..............  Vitreous China Plumbing   Vitreous China Plumbing 
                       Fixture and China         Fixtures and China and 
                       Earthenware Fittings      Earthenware Bathroom   
                       and Bathroom              Accessories            
                       Accessories               Manufacturing.         
                       Manufacturing.                                   
3274................  Lime, Gypsum and Gypsum   Lime and Gypsum Product 
                       Product Manufacturing.    Manufacturing.         
32742...............  Gypsum and Gypsum         Gypsum Product          
                       Product Manufacturing.    Manufacturing.         
33149...............  Nonferrous Metals         Nonferrous Metal (except
                       (except Copper and        Copper and Aluminum)   
                       Aluminum) Rolling,        Rolling, Drawing,      
                       Drawing, Extruding, and   Extruding, and         
                       Alloying.                 Alloying.              
331521..............  Aluminum Die-Castings...  Aluminum Die-Casting    
                                                 Foundries.             
331522..............  Nonferrous (except        Nonferrous (except      
                       Aluminum) Die-Casting.    Aluminum) Die-Castings 
                                                 Foundries.             
331524..............  Aluminum Foundries......  Aluminum Foundries      
                                                 (except Die-Casting).  
331525..............  Copper Foundries........  Copper Foundries (except
                                                 Die-Casting).          
331528..............  Other Nonferrous          Other Nonferrous        
                       Foundries.                Foundries (except Die- 
                                                 Casting).              
33210...............  Iron and Steel Pipes and  Iron and Steel Pipe and 
                       Tubes Manufacturing       Tube Manufacturing from
                       from Purchased Steel.     Purchased Steel.       
332611..............  Steel Spring (except      Spring (Heavy Gauge)    
                       Wire) Manufacturing.      Manufacturing.         
332612..............  Wire Spring               Spring (Light Gauge)    
                       Manufacturing.            Manufacturing.         
33322...............  Rubber and Plastics       Plastics and Rubber     
                       Industry Machinery        Industry Machinery     
                       Manufacturing.            Manufacturing.         
333414..............  Heating Equipment         Heating Equipment       
                       (except Electric and      (except Warm Air       
                       Warm Air Furnaces)        Furnaces)              
                       Manufacturing.            Manufacturing.         
333999..............  All Other General         All Other Miscellaneous 
                       Purpose Machinery         General Purpose        
                       Manufacturing.            Machinery              
                                                 Manufacturing.         
334412..............  Printed Circuit Board     Bare Printed Circuit    
                       Manufacturing.            Board Manufacturing.   
334418..............  Printed Circuit/          Printed Circuit Assembly
                       Electronics Assembly      (Electronic Assembly)  
                       Manufacturing.            Manufacturing.         
335912..............  Dry and Wet Primary       Primary Battery         
                       Battery Manufacturing.    Manufacturing.         
33636...............  Motor Vehicle Fabric      Motor Vehicle Seating   
                       Accessories and Seat      and Interior Trim      
                       Manufacturing.            Manufacturing.         
337214..............  Nonwood Office Furniture  Office Furniture (except
                       Manufacturing.            Wood) Manufacturing.   
4222................  Drug, Drug Proprietaries  Drugs and Druggists'    
                       and Druggists' Sundries   Sundries Wholesalers.  
                       Wholesalers.                                     
42221...............  Drug, Drug Proprietaries  Drugs and Druggists'    
                       and Druggists' Sundries   Sundries Wholesalers.  
                       Wholesalers.                                     
42233...............  Women's, Children's, and  Women's, Children's, and
                       Infants' and              Infants' Clothing and  
                       Accessories Wholesalers.  Accessories            
                                                 Wholesalers.           
42272...............  Petroleum and Petroleum   Petroleum and Petroleum 
                       Products (except Bulk     Products Wholesalers   
                       Stations and Terminals)   (except Bulk Stations  
                       Wholesalers.              and Terminals).        
493.................  Warehousing and Storage   Warehousing and Storage.
                       Facilities.                                      
4931................  Warehousing and Storage   Warehousing and Storage.
                       Facilities.                                      
49311...............  General Warehousing and   General Warehousing and 
                       Storage Facilities.       Storage.               
49312...............  Refrigerated Warehousing  Refrigerated Warehousing
                       and Storage Facilities.   and Storage.           
49313...............  Farm Product Warehousing  Farm Product Warehousing
                       and Storage Facilities.   and Storage.           
49319...............  Other Warehousing and     Other Warehousing and   
                       Storage Facilities.       Storage.               
512131..............  Motion Picture Theaters,  Motion Picture Theaters 
                       Except Drive-Ins.         (except Drive-Ins).    
52231...............  Mortgage and Other Loan   Mortgage and Nonmortgage
                       Brokers.                  Loan Brokers.          
523.................  Securities, Commodity     Securities, Commodity   
                       Contracts and Other       Contracts, and Other   
                       Intermediation and        Financial Investments  
                       Related Activities.       and Related Activities.
52314...............  Commodity Brokerage.....  Commodity Contracts     
                                                 Brokerage.             
524291..............  Claims Adjustors........  Claims Adjusting.       
524292..............  Third Party               Third Party             
                       Administration for        Administration of      
                       Insurance and Pension     Insurance and Pension  
                       Funds.                    Funds.                 
525.................  Funds, Trusts and Other   Funds, Trusts, and Other
                       Financial Vehicles        Financial Vehicles.    
                       (U.S. only).                                     
533.................  Owners and Lessors of     Lessors of Nonfinancial 
                       Other Non-Financial       Intangible Assets      
                       Assets.                   (except Copyrighted    
                                                 Works).                
5331................  Owners and Lessors of     Lessors of Nonfinancial 
                       Other Non-Financial       Intangible Assets      
                       Assets.                   (except Copyrighted    
                                                 Works).                
53311...............  Owners and Lessors of     Lessors of Nonfinancial 
                       Other Non-Financial       Intangible Assets      
                       Assets.                   (except Copyrighted    
                                                 Works).                
541614..............  Process, Physical,        Process, Physical       
                       Distribution, and         Distribution, and      
                       Logistics Consulting      Logistics Consulting   
                       Services.                 Services.              
54171...............  Research and Development  Research and Development
                       in the Physical           in the Physical,       
                       Sciences and              Engineering, and Life  
                       Engineering Sciences.     Sciences.              
721214..............  Recreational and          Recreational and        
                       Vacation Camps.           Vacation Camps (except 
                                                 Campgrounds).          
81221...............  Funeral Homes...........  Funeral Homes and       
                                                 Funeral Services.      
8123................  Laundry Services........  Drycleaning and Laundry 
                                                 Services.              
813.................  Religious, Grantmaking,   Religious, Grantmaking, 
                       Civic, and                Civic, Professional,   
                       Professional, and         and Similar            
                       Similar Organizations.    Organizations.         
8139................  Business, Professional,   Business, Professional, 
                       Labor, Political, and     Labor, Political, and  
                       Other Organizations.      Similar Organizations. 
81399...............  Other Similar             Other Similar           
                       Organizations.            Organizations (except  
                                                 Business, Professional,
                                                 Labor, and Political   
                                                 Organizations).        
921.................  Executive, Legislative,   Executive, Legislative, 
                       Public Finance, and       and Other General      
                       General Government.       Government Support.    
9211................  Executive, Legislative,   Executive, Legislative, 
                       Public Finance, and       and Other General      
                       General Government.       Government Support.    
92113...............  Public Finance..........  Public Finance          
                                                 Activities.            

[[Page 41699]]

                                                                        
92119...............  All Other General         Other General Government
                       Government.               Support.               
922.................  Justice, Public Order,    Justice, Public Order,  
                       and Safety.               and Safety Activities. 
9221................  Justice, Public Order,    Justice, Public Order,  
                       and Safety.               and Safety Activities. 
92219...............  All Other Justice,        All other Justice,      
                       Public Order, and         Public Order, and      
                       Safety.                   Safety Activities.     
92313...............  Administration of         Administration of Human 
                       Social, Human Resource    Resource Programs      
                       and Income Maintenance    (except Education,     
                       Programs.                 Public Health, and     
                                                 Veteran's Affairs      
                                                 Programs).             
92411...............  Air and Water Resource    Administration of Air   
                       and Solid Waste           and Water Resource and 
                       Management.               Solid Waste Management 
                                                 Programs.              
92412...............  Land, Mineral, Wildlife,  Administration of       
                       and Forest Conservation.  Conservation Programs .
------------------------------------------------------------------------

Structure Changes

    Manufacturing--NAICS U.S. Industry 315238, Women's and Girls' Cut 
and Sew Other Outerwear Manufacturing, has been renumbered to 315239. 
NAICS U.S. industry 322292, Surface-Coated Paper Board Manufacturing, 
has been moved and renumbered to NAICS U.S. industry 322226, Surface-
Coated Paperboard Manufacturing. NAICS U.S. industry 322298, All Other 
Converted Paper Product Manufacturing, has been renumbered 322299; the 
title remains the same.
    Professional, Scientific, and Technical Services--NAICS industry 
54172, Research and Development in the Life Sciences, has been combined 
with 54171, Research and Development in the Physical Sciences and 
Engineering Sciences, and renamed Research and Development in the 
Physical, Engineering, and Life Sciences. NAICS industry 54173, 
Research and Development in the Social Sciences and Humanities, has 
been renumbered 54172.
    Other Services--NAICS industry 81239, Other Laundry Services, has 
been combined with NAICS industry 81232, Drycleaning and Laundry 
Services (except Coin-Operated). The following NAICS U.S. industries 
are now included in NAICS industry 81232 and no longer shown 
separately: 812321, Laundries, Family and Commercial; 812322, 
Drycleaning Plants; 812391, Garment Pressing, and Agents for Laundries; 
and 812399, All Other Laundry Services.

Availability of NAICS United States Manual

    The official U.S. reference manual for implementing the new North 
American Industry Classification System (NAICS) is now available in 
both printed and electronic versions from the National Technical 
Information Service (NTIS). The NAICS-United States Manual includes:
     Definitions for each industry;
     Tables showing correspondence between 1997 NAICS and 1987 
SIC codes; and
     An alphabetical index of types of business activities and 
their NAICS codes.
    A CD-ROM version of the Manual includes features not available in 
print versions:
     An easy-to-use yet powerful search option, including 
access to more comprehensive index entries; and
     NAICS-SIC and SIC-NAICS code comparison files that can be 
imported into databases and spreadsheets.
    NTIS is now accepting orders at 1-800-553-6847 or (703) 605-6000. 
The NAICS-United States Manual is available in hardcover (PB98-127293, 
$32.50), in softcover (PB98-136187, $28.50), and on CD-ROM (PB98-
502024, $45). A $5 handling fee is added to each total order. For more 
information or to order online, visit the NTIS NAICS web site at 
<http://www.ntis.gov/naics>.
    More information about the new system can be found at the Census 
Bureau's NAICS World Wide Web site, <http://www.census.gov/naics>. The 
Census Bureau has also established a toll-free telephone line (1-888-
75NAICS) to help businesses and other users with the new system.

NAICS United States Implementation

    The NAICS United States replacement of the SIC is effective January 
1, 1997, for Federal statistical purposes. The first data to be 
available on a NAICS United States basis will be from the 1997 Economic 
Census and the 1997 Foreign Direct Investment Benchmark Survey that 
will be published in 1999. For most programs, data will be introduced 
over several years. Data series may not always be revised for years 
before the respective program's implementation of NAICS United States.
    INEGI, OMB, and Statistics Canada have put in place a process for 
ensuring that the implementation of NAICS is comparable across all 
three countries. Regularly scheduled meetings among the three countries 
will ensure that there is a smooth transition to NAICS in all three 
countries. In addition, the three countries plan to continually review 
and update NAICS to ensure that new activities are promptly recognized 
and to extend NAICS to the 5-digit industry level in those sectors 
where agreement is now at only the sector, subsector, or industry group 
level.

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, the full impact of the revision can be 
assessed. Data producers then may measure the reallocation of the data 
at aggregate industry levels and develop a concordance between the new 
and old series for that point in time. The concordance creates a 
crosswalk between the old and new classification systems. This link 
between the 1987 U.S. SIC and the 1997 NAICS United States will be 
developed by the statistical agencies in the U.S.

Nonstatistical Use of NAICS

    NAICS was designed, as was the SIC before it, solely for 
statistical purposes. Although it is likely that NAICS, like the SIC, 
will also be used for various nonstatistical purposes (e.g., 
administrative, regulatory, or taxation), the requirements of 
government agencies that choose to use NAICS for nonstatistical 
purposes have played no role in its development.
    Consequently, as has been the case with the SIC (Statistical Policy 
Directive No. 8, Standard Industrial Classification of Establishments), 
NAICS shall not be used in any administrative, regulatory, or tax 
program unless the head of the agency administering that program has 
first determined that the use of such industry definitions is 
appropriate to the implementation of the program's objectives. If the 
terms, ``North American Industry Classification System,'' ``NAICS,'' or 
``NAICS United States'' are to be used in the operative text of any law 
or regulation to define industry (or trade or commerce), language 
similar to the following should

[[Page 41700]]

be used to assure sufficient flexibility: ``An industry or grouping of 
industries shall mean a North American Industry Classification System 
industry or grouping of industries as defined by the Office of 
Management and Budget subject to such modifications with respect to 
individual industries or groupings of industries as the Secretary 
(Administrator) may determine to be appropriate for the purpose of this 
Act (regulation).''
Donald R. Arbuckle,
Deputy Administrator and Acting Administrator, Office of Information 
and Regulatory Affairs.
[FR Doc. 98-20689 Filed 8-3-98; 8:45 am]
BILLING CODE 3110-01-P