Notice2024-30060
Statistical Policy Directive No. 8 North American Industry Classification System (NAICS)-Request for Comments on Possible Revisions for 2027
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Published
December 20, 2024
Issuing agencies
Management and Budget Office
Abstract
The Office of Management and Budget (OMB), on behalf of the Economic Classification Policy Committee (ECPC), announces the review of the 2022 North American Industry Classification System (NAICS) for potential revisions to be made to the structure and content of the NAICS for 2027 and solicits public comment. Details about these topics are available in the SUPPLEMENTARY INFORMATION section below.
Full Text
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[Federal Register Volume 89, Number 245 (Friday, December 20, 2024)]
[Notices]
[Pages 104229-104232]
From the Federal Register Online via the Government Publishing Office [<a href="http://www.gpo.gov">www.gpo.gov</a>]
[FR Doc No: 2024-30060]
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OFFICE OF MANAGEMENT AND BUDGET
Statistical Policy Directive No. 8 North American Industry
Classification System (NAICS)--Request for Comments on Possible
Revisions for 2027
AGENCY: Office of Information and Regulatory Affairs, Office of
Management and Budget, Executive Office of the President.
ACTION: Notice of Solicitation for Proposals to Revise Portions of the
NAICS for 2027.
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SUMMARY: The Office of Management and Budget (OMB), on behalf of the
Economic Classification Policy Committee (ECPC), announces the review
of the 2022 North American Industry Classification System (NAICS) for
potential revisions to be made to the
[[Page 104230]]
structure and content of the NAICS for 2027 and solicits public
comment.
Details about these topics are available in the SUPPLEMENTARY
INFORMATION section below.
DATES: To ensure consideration of comments on this notice, they must be
received no later than February 18, 2025. Because of delays in the
receipt of regular mail related to security screening, respondents are
encouraged to send comments electronically (see ADDRESSES, below.
ADDRESSES: Submit comments through <a href="http://www.regulations.gov">www.regulations.gov</a>--a Federal E-
Government website that allows the public to find, review, and submit
comments on documents that agencies have published in the Federal
Register and that are open for comment. Simply type ``USBC-2024-0032''
(in quotes) in the Comment or Submission search box, click Go, and
follow the instructions for submitting comments. Comments received by
the date specified above will be included as part of the official
record. Please include the Docket ID (USBC-2024-0032) and the phrase
``2022 North American Industry Classification System (NAICS)--Revisions
for 2027 Comments'' at the beginning of your comments.
Privacy Act Statement: OMB is issuing this solicitation of input on
the 2027 NAICS revision pursuant to its authorities under 31 U.S.C.
1104(d) and 5 U.S.C. 3504(e). Submission of comments in response to
this request is voluntary. Comments may be used to inform sound
decision making on topics related to this request, including potential
revisions to the NAICS. Please note that submissions received in
response to this notice may be posted on <a href="http://www.regulations.gov">www.regulations.gov</a> or
otherwise released in their entirety, including any personal
information, business confidential information, or other sensitive
information provided by the commenter. Do not include in your
submissions any copyrighted material; information of a confidential
nature, such as personal or proprietary information; or any information
you would not like to be made publicly available. Comments and
commenter information are maintained under the OMB Public Input System
of Records, OMB/INPUT/01; the system of records notice is accessible at
88 FR 20913 (<a href="http://www.federalregister.gov/documents/2023/04/07/2023-07452/privacy-act-of-1974-system-of-records">www.federalregister.gov/documents/2023/04/07/2023-07452/privacy-act-of-1974-system-of-records</a>) and includes a list of routine
uses associated with the collection of this information.
Electronic Availability: Federal Register notices are available
electronically at <a href="http://www.federalregister.gov">www.federalregister.gov</a>. This document is also
available on the NAICS website at <a href="http://www.census.gov/naics">www.census.gov/naics</a>. This site
contains previous NAICS United States Federal Register notices, ECPC
Issues Papers, ECPC Reports, the structure and industry definitions for
all NAICS United States versions, and related documents.
Public Review Procedure: All comments and proposals received in
response to this notice will be available for public inspection. OMB
will publish all ECPC recommendations for changes to NAICS for 2027
resulting from this notice in the Federal Register for review and
comment prior to final action.
For general inquiries email: <a href="/cdn-cgi/l/email-protection#9bc8effaeff2e8eff2f8faf7c4dff2e9fef8eff2edfee8dbf4f6f9b5fef4ebb5fcf4ed"><span class="__cf_email__" data-cfemail="60331401140913140903010c3f24091205031409160513200f0d024e050f104e070f16">[email protected]</span></a>.
The NAICS classification staff may be reached by email at
<a href="/cdn-cgi/l/email-protection#c9acaaa6a7e7a7a8a0aabafbf9fbfe89aaaca7babcbae7aea6bf"><span class="__cf_email__" data-cfemail="80e5e3efeeaeeee1e9e3f3b2b0b2b7c0e3e5eef3f5f3aee7eff6">[email protected]</span></a>. Please note: Communication through this
email will not be included in the record for USBC-2024-0032. Comments
should be submitted through <a href="https://www.federalregister.gov">https://www.federalregister.gov</a>.
SUPPLEMENTARY INFORMATION: Under the authority of the Budget and
Accounting Procedures Act of 1950 (31 U.S.C. 1104(d)) and the Paperwork
Reduction Act of 1995 (44 U.S.C. 3504(e)), OMB, on behalf of the ECPC,
announces the review and potential revision of the structure and
content of the 2022 NAICS. OMB solicits public comment on all aspects
of the NAICS, with an emphasis on new and emerging industries. However,
in soliciting comments about revising NAICS, the ECPC does not intend
to open the entire classification structure for substantial change in
2027. The ECPC will consider public comments and proposals for changes
or modifications that are consistent with the principles guiding the
development of NAICS as outlined in the ``BACKGROUND'' section below.
This is the first Federal Register Notice requesting public comment
in the process leading up to the potential 2027 NAICS revision. More
information on the NAICS, including information on past revision
processes, is available at <a href="http://www.census.gov/naics">www.census.gov/naics</a>.
I. Background
The Chief Statistician of the United States at OMB coordinates the
Federal statistical system by developing and overseeing the
implementation of Government-wide principles, policies, standards, and
guidelines concerning the presentation and dissemination of statistical
information. These coordination efforts promote the efficiency and
effectiveness of the Federal statistical system. More information on
the Federal statistical system, including its structure and policies
that govern it, is available at <a href="http://www.statspolicy.gov">www.statspolicy.gov</a>.
One such standard for statistical data classification established
by OMB is Statistical Policy Directive No. 8: North American Industry
Classification System: Classification of Establishments (NAICS). NAICS
is a system for classifying establishments (individual business
locations) 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 North American economy. The OMB-Recognized Statistical
Agencies and Units use NAICS to collect and publish data by industry,
and NAICS is also widely used by State agencies, trade associations,
private businesses, and other organizations.
Mexico's Instituto Nacional de Estad[iacute]stica y
Geograf[iacute]a (INEGI), Statistics Canada, and the United States
Office of Management and Budget, through the ECPC, collaborate on NAICS
to make the industry statistics produced by the three countries
comparable. NAICS is an industry classification system developed in
accordance with a single principle of aggregation: producing units that
use similar production processes should be grouped together in the
classification. NAICS also reflects changes in technology and in the
growth and diversification of services in recent decades. Industry
statistics presented using NAICS 2022 are extensively comparable with
statistics compiled according to the latest revision of the United
Nations' International Standard Industrial Classification of All
Economic Activities (ISIC, Revision 5). For the three North American
countries, NAICS provides a consistent framework for the collection,
tabulation, presentation, and analysis of industry statistics used by
government policy analysts, academics and researchers, the business
community, and the public.
Please note that NAICS is designed and maintained solely for
statistical purposes, in order to improve and keep current the
statistical rigor of this Federal statistical standard. Consequently,
although the classification may also be used for various nonstatistical
purposes (e.g., for administrative, regulatory, or taxation functions),
the requirements of government agencies or private users that choose to
use NAICS for nonstatistical purposes play no role in its development
or revision.
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Four principles guide NAICS development:
(1) NAICS is erected on a production-oriented 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.
(4) The system strives for compatibility with the two-digit level
(see below) of the International Standard Industrial Classification of
All Economic Activities (ISIC, Rev. 5) of the United Nations.
The ECPC is committed to maintaining the principles of NAICS as it
develops recommendation for further refinements.
NAICS uses a hierarchical structure to classify establishments from
the broadest level to the most detailed level using the following
format:
Sector..................... 2-digit.............. Sectors represent
the highest level
of aggregation.
There are 20
sectors in NAICS.
Subsector.................. 3-digit.............. Subsectors represent
the next, more
detailed level of
aggregation. There
are 96 subsectors
in NAICS 2022.
Industry Group............. 4-digit.............. Industry groups are
more detailed than
subsectors. There
are 308 industry
groups in NAICS
2022.
NAICS Industry............. 5-digit.............. NAICS industries, in
most cases,
represent the
lowest level of
three-country
comparability.
There are 689 five-
digit industries in
NAICS 2022.
National Industry.......... 6-digit.............. National industries
are the most
detailed level and
represent the
national level
detail. There are
1,012 national
industries in NAICS
United States 2022.
To ensure the accuracy, timeliness, and relevance of the
classification, NAICS is reviewed every five years to determine what,
if any, changes are required. The 2027 review will be the sixth since
OMB adopted the NAICS as an official standard statistical
classification in 1997. The ECPC recognizes the potential costs
involved when adopting, implementing, and tracking the impacts of
industry classification revisions in statistical programs. The ECPC
also recognizes the economic, statistical, and policy implications that
arise when the industry classification system does not identify and
account for important economic developments. Balancing the costs of
change against the potential for more accurate and relevant economic
statistics requires significant input from data producers, data
providers, and data users.
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NAICS version Date published Federal Register
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1997........................ April 9, 1997....... 62 FR 17288.
2002........................ January 16, 2001.... 66 FR 3826.
2007........................ May 16, 2006........ 71 FR 28532.
2012........................ August 17, 2011..... 76 FR 51240.
2017........................ August 8, 2016...... 81 FR 52584.
2022........................ December 21, 2021... 86 FR 72277.
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The ECPC solicits and welcomes comments across all of the NAICS
sectors, and also seeks comments concerning the following items: new
and emerging industries and recommended revisions for measuring
elements of the bioeconomy.
II. New and Emerging Industries
NAICS is a dynamic industry classification. Every five years, the
classification is reviewed to determine the need to identify new and
emerging industries. The ECPC is soliciting public comments on the
advisability of revising NAICS for new and emerging industries in 2027
and soliciting proposals for these new industries.
When developing proposals for new and emerging industries, please
note that there are two separate but related economic classifications
in the United States. NAICS, the industry classification, is the
subject of this notice, while the North American Product Classification
System (NAPCS) is product classification. The NAPCS product system
described below complements the NAICS industry system and provides an
alternate way of classifying output.
NAICS classifies units according to their production function.
NAICS industries group units undertaking similar activities using
similar resources but does not necessarily group all similar products
or outputs. NAPCS, on the other hand, classifies the outputs of units,
or in other words their products or transactions, within a demand-based
conceptual framework. For example, the hypothetical product of a flu
shot can be provided by a doctor's office, a hospital, or a walk-in
clinic. Because these three units are classified to three different
NAICS industries, data users who want information about all flu shots
provided must be able to identify the individual products coming out of
the units, which NAPCS is designed to do. Thus, in many cases, the need
for specific statistical data can be met by aggregating product data
across industries as NAPCS does, rather than by creating a new
industry. This cross-sector measurement level is particularly true with
NAICS, which groups establishments into industries based on their
primary production function. NAPCS was initiated in 1999, followed by a
lengthy development and collaborative harmonizing efforts. The first
NAPCS revision cycle began in 2022, concurrent with the NAICS. This
cycle will continue on the same 5-year revision cycle as NAICS.
Proposals for new industries in NAICS for 2027 will be evaluated
within the context of the industry and product classification systems
to determine the most appropriate resolution. For a detailed
description of the NAPCS initiative, see the April 16, 1999, Federal
Register notice (64 FR 18984), available at <a href="http://www.census.gov/naics/napcs">www.census.gov/naics/napcs</a>.
Proposals for new industries will be evaluated using a variety of
criteria. As previously mentioned, each proposal will be evaluated
based on the application of the production function concept, its impact
on comparability within North America and with other regions, and its
impact on time series. For any proposals that cross three-country
levels of agreement, negotiations with Canada and Mexico,
[[Page 104232]]
our partners in NAICS, will also influence the ECPC's recommendations
on those proposals.
In addition, other criteria may affect recommendations for
adoption. From a practical standpoint, industries must be of
appropriate size. At the national level, this is generally not a major
concern, but there are a variety of statistical programs that produce
industry data at the regional, State, metropolitan area, or even county
or local level. A proposed industry must include a sufficient number of
establishments so that Federal agencies can publish industry data
without disclosing information about the operations of individual
firms.
The ability of government agencies to classify, collect, and
publish data on the proposed basis will also be taken into account.
Proposed changes must be such that they can be applied by agencies
within their normal processing operations. Any recommendations for
change by the ECPC for consideration will also take into account the
cost of making the changes. These costs can be considerable and the
availability of funding to make changes is critical. The budgetary
environment will be considered when the ECPC makes recommendations. As
mentioned above, certain proposals may be more adequately addressed
through the identification and collection of product data.
Proposals for new or revised industries should be consistent with
the production-oriented conceptual framework incorporated into the
principles of NAICS. When formulating proposals, please note that an
industry classification system groups the economic activities of
producing units, which means that the activities of similar producing
units cannot be separated in the industry classification system.
Proposals must include the following information:
(1) Specific economic activities to be covered by the proposed
industry, the proposed industry's production processes, its specialized
labor skills, and any unique equipment and materials used. This detail
should demonstrate that the proposed industry will group establishments
with similar production processes that are unique and clearly separable
from the production processes of other industries.
(2) Relationship of the proposed industry to existing NAICS United
States 2022 six-digit national industries and whether the proposed
industry would impact trilateral NAICS levels (as specified by ``T''
superscripts in the 2022 NAICS structure).
(3) Documentation of the size and recent and projected growth of
the proposed industry in the United States.
(4) Information about the size and importance of the proposed
industry in Canada and Mexico, if available.
Proposals will be collected, reviewed, and analyzed by the ECPC. As
necessary, proposals for change will be negotiated with our partners in
Canada and Mexico. When this process is complete, OMB will publish a
Federal Register notice that contains the ECPC recommendations for
revisions for additional public comment prior to a final OMB
determination of any changes to NAICS for 2027.
III. Improve Measures of Emerging/Innovative Industrial Activity,
Including the Bioeconomy
Consistent with Executive Order 14081, Advancing Biotechnology and
Biomanufacturing Innovation for a Sustainable, Safe, and Secure
American Bioeconomy, the Interagency Technical Working Group on
Developing, Recommending and Assessing Current Industry and Product
Classifications for the Emerging Bioeconomy submitted a report to OMB
with recommendations for revisions to NAICS for advancing measurement
in this area.\1\ In this report, the Working Group stated that there
has been sustained growth and diversification in biotechnology,
biomanufacturing, and the related use of biological resources to
supplement, and in some industries, replace more traditional production
methods. The report also discussed several challenges with measuring
this part of the economy, and included recommendations for revisions to
both the NAICS and NAPCS. As mentioned above, especially in this area,
some proposals may be more adequately addressed through the
identification and collection of product versus industry data.
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\1\ Interagency Tech. Working Grp. on Developing, Recommending
and Assessing Current Indus. & Product Classifications for the
Emerging Bioeconomy, Measuring the Bioeconomy: Recommended Revisions
to the NAICS and NAPCS (Sept. 12, 2023), available at <a href="http://www.usda.gov/sites/default/files/documents/OCE-Measuring-the-Bioeconomy.pdf">www.usda.gov/sites/default/files/documents/OCE-Measuring-the-Bioeconomy.pdf</a>.
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The ECPC is soliciting public comments regarding the
recommendations included in the report, to support development of
related final ECPC recommendations to OMB. In particular, ECPC is
interested in the following issues: What impact might these potential
changes to the NAICS have on existing industry measurements, for
example economic output and employment, continuity of time series
measures? What methodologies should compilers of Federal economic data
apply to differentiate bioeconomic processes from current production
processes to enable measurement? What potential bioeconomy measurement
strategies might be considered other than revisions to and inclusion in
the NAICS?
IV. Errors and Omissions in NAICS
No significant errors or omissions have been identified in NAICS
2022. Any errors or omissions that are identified in NAICS in the
future will be corrected and posted on the official NAICS website at
<a href="http://www.census.gov/naics">www.census.gov/naics</a>.
V. Timing for the 2027 NAICS Revision Process
Following this public comment period, the ECPC will review the
comments and develop any proposed revisions for the 2027 NAICS. Then
OMB will publish ECPC's proposed revisions for public comment in a
subsequent Federal Register Notice. The ECPC will then review the
comments and develop final recommendations to the Chief Statistician of
the United States at OMB on the proposed revisions for the 2027 NAICS.
OMB will consider the final recommendations from the ECPC and will
publish the updated classification for 2027 NAICS in calendar year
2026. The NAICS 2027 will be available on the Census Bureau website in
January 2027.
Karin A. Orvis,
Chief Statistician of the United States.
[FR Doc. 2024-30060 Filed 12-19-24; 8:45 am]
BILLING CODE P
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