ECONOMIC CENSUS



The U.S. economic census provides information about the structure and function of the nation's economy, from the national level to the local level, every five years. The Bureau of the Census is mandated by Title Thirteen of the United States Code (sections 131, 191, and 224) to develop an economic census every five years, covering years ending in two and seven. The 2002 Economic Census covers about 98 percent of the U.S. economy in its collection of establishment statistics. There are also several related census programs, including: censuses for outlying areas of Guam, Puerto Rico, U.S. Virgin Islands, and the Commonwealth of the Northern Mariana Islands; and additional reports on minority- and women-owned businesses (available in 2006), surveys of business expenditures, and nonemployer statistics. In addition, the Census of Agriculture and Census of Governments are conducted at the same time.

COLLECTING, COMPILING, AND ISSUING
THE CENSUS DATA

With the exception of the Census of Agriculture, which is conducted by the Department of Agriculture, the 2002 Economic Census covered the entire economy of about 20 million business establishments. In December 2002, the Census Bureau mailed 600 versions of the census forms; these forms were tailored to the five-million businesses receiving them. Data for those not receiving forms—generally self-employed individuals with no paid employees—are obtained from other federal agencies.

The 2002 Economic Census consists of general statistics available for the nation, states, metropolitan areas, counties, places with 2,500 or more inhabitants, and zip code areas. All operations of a particular business location are summarized. Product statistics cover products, lines of merchandise, and lines of service provided by business establishments. For example, one can determine how much hardware is sold by all kinds of stores, not just hardware stores.

The Census Bureau compiles the data and issues report series on industry, geographic area, subject, and zip code. These reports are based on the North American Industry Classification System (NAICS). The new Advance Report presents economy-wide data at the national level. The Industry Series reports are issued only for individual industries in the goods-producing part of the economy—manufacturing, mining, and construction. They provide data primarily at the national level, although there is some state data. The Geographic Area Series will be issued separately for each of the twenty NAICS sectors. Within several sectors, there will be individual state-by-state reports. There will only be a few Subject Series Reports, primarily at the national level, that will provide additional analyses of industries. Of special significance are the Merchandise Line Sales report for retail businesses and Commodity Line Sales report for wholesale trade. Zip code statistics are issued for manufacturing, retail trade, and the service industries. The data for all components of the economic census generally include the number of establishments, number of employees, annual payroll, and measures of output such as sales or receipts. More detailed economic statistics vary by sector.

PRE-2002 ECONOMIC CENSUS DATA

The economic census is an integrated program collected in 5-year intervals since 1967, and before that for 1963, 1958, and 1954. In other words, the census provided comparable data across economic sectors using consistent time periods, definitions, classifications, and reporting units. Prior to 1954, the individual censuses were taken separately at varying time periods. The economic censuses were first incorporated in the 1810 Decennial Census, when questions dealing with manufacturing were included. The first census of business was taken in 1930 and included wholesale and retail trade. Industries continued to be added to the census. In 1933, some service industries were included; the census of transportation was added in 1963 and the census of construction began on a regular basis in 1967. Finally, the 1992 Economic Census included eight sectors: census of construction industries; census of finance, insurance, and real estate; census of manufactures; census of mineral industries; census of retail trade; census of service industries; census of transportation, communication, and utilities; and the census of wholesale trade.

NAICS AND THE 2002 ECONOMIC CENSUS

The North American Industry Classification System replaced the Standard Industrial Classification (SIC) system that began in the 1930s and was revised in 1967, 1972, 1987, and 2002. This new classification system organizes establishments into industries by type of producing and non-producing activities in which they are involved, rather than organizing business activities into a mixture of production and market-based categories (as in the past). The NAICS uses a numbering system of six digits instead of SIC's four digits, and increases the number of sectors of economic activity from ten to twenty. This allows more flexibility in designating subsectors and allows for expansion, especially for the service sector industries. With the NAICS, it is now possible to compare economic activity in the United States with that of Canada and Mexico.

The implementation of NAICS caused a major disruption when comparing data from the 1997 Economic Census with previous census data. NAICS data time series can go forward from 1997, but many of the time series cannot go back in time because the NAICS categories require information not collected in earlier censuses; the hierarchy within the levels of classification and the scope for the sectors have changed. The 2002 Economic Census published data primarily on the basis of the 2002 North American Industry Classification System. Changes between the 1997 and 2002 NAICS were within construction and wholesale trade and did not effect sector totals. NAICS 2002 introduces a number of new industries—including residential remodelers, discount department stores, electronic shopping, electronic auctions, wholesale electronic markets, internet publishing and broadcasting, and web search portals. Economic Census comparisons are easier to make since 90 percent of all industries are comparable between 1997 and 2002. To facilitate comparisons, the 2002 Economic Census includes bridge tables and comparative statistics. Advance Comparative Statistics for the United States 1997 NAICS Basis will present 1997 and 2002 data at the national level.

USES OF THE ECONOMIC CENSUS

In summing up the importance of the census, Alan Greenspan (chairman of the Federal Reserve Board) stated that the census provides accurate statistics essential for sound economic policy and successful business planning. All levels of government, business, industry, and the general public use the statistical information from the economic census. It provides an essential framework for such measures as the production and price indexes, gross domestic product, input/output measures, and other key data that determine changes in the economy. Policymaking agencies of the federal government use these data to monitor and guide economic activity as well as to provide assistance to businesses. State and local governments use this information to assess business activities and tax bases within their jurisdictions.

According to the Census Bureau, individual businesses use the census data to gauge the competition, calculate market share, locate business markets, identify business site locations, design sales territories, set sales quotas, and evaluate new business opportunities. Trade associations study trends in their industries to keep members abreast of market changes. Consultants and researchers use census data to analyze market structure.

LEARNING ABOUT AND ACCESSING
THE ECONOMIC CENSUS

The Census Bureau provides access to over 60,000 documents via its Web site. The Census Catalog and Guide, Monthly Product Announcement, and Census and You provide the latest information about Census Bureau products, programs, and future plans. Federal depository collections found in many public and academic libraries, Census Data Centers located in all states, and census data specialists are also available to assist local users. The Guide to the 2002 Economic Census is the best single source for learning about the 2002 Economic Census.

There were a number of significant changes in the 2002 Economic Census. The 2002 Economic Census includes "enterprise support" establishments, thus providing additional data on outsourcing activities that will impact comparisons between certain industries. The 2002 survey also gathered e-commerce information for the first time. New industries added in the 2002 Economic Census include Landscape Architectural Services, Veterinary Services, Landscaping Services, and Pet Care (except Veterinary) Services. The metropolitan statistical area concept is being supplemented with several hundred new, micropolitan, statistical areas, meaning data will be available for many new counties outside metropolitan areas. Selected data and reports are now available to the public on the American FactFinder site.

Most importantly, all components of the census will be available in database format on the Internet, DVD, and CD-ROM. This means faster publication and wider access along with fewer printed reports. Furthermore, the introduction of the new industry classification system provides a more accurate snap-shot of the economy, and there will be greater integration of the census data economy-wide.

SEE ALSO: North American Industry Classification System

William W. Prince

Revised by Hal P. Kirkwood , Jr.

FURTHER READING:

"Economic Census 2002 Features Many Firsts" CPA Journal 73, no. 2 (2003): 16.

Parker, Robert P. "Economic Statistics: New Data Available in 2004." Business Economics 39, no. 2 (2004): 63–66.

U.S. Census Bureau. American FactFinder. Available from < http://factfinder.census.gov/servlet/SAFFBusiness?_sse=on >.

U.S. Census Bureau. 2002 Economic Census: Introduction. Available from < http://www.census.gov/econ/census02/text/sector00/intro.htm >.

U.S. Census Bureau. 2002. The Guide to the 2002 Economic Census. Available from < http://www.census.gov/epcd/ec02/guide.html >.

U.S. Office of Management and Budget. 2002. North American Industry Classification System–United States, 2002. Washington: Government Printing Office. Available from: < http://www.census.gov/naics >.



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