Introduction
The Australian and New Zealand Standard Industrial Classification (ANZSIC) was released in 1993. It was produced jointly by the Australian Bureau of Statistics and Statistics New Zealand and is presently used in both countries for the production and analysis of official industry statistics. It is also widely used in administrative systems and other statistical databases.
The purpose of an industry classification is to provide a standard framework in which units carrying out similar activities can be grouped. Each grouping of units defines an industry. These groupings facilitate standardised collection, analysis, dissemination and production of economic data on an industry basis.
It is time for the 1993 ANZSIC to be updated to ensure that it continues to reflect the structure of the current economy. There has been growth in the services, information and environmental areas, and the revised ANZSIC will reflect these changes in the economy. In addition, the revised ANZSIC will adopt a more consistent supply-side conceptual framework so that the classification better meets users' needs. The conceptual framework that will be used for the revised ANZSIC is set out in the section below titled 'Conceptual Framework of the revised ANZSIC'.
Aims of the Proposed Revision
The ABS/SNZ review of ANZSIC 1993, which will culminate in ANZSIC 2006, is currently underway. The review aims to update the current classification to one which best reflects contemporary and future industries. The primary objective of this review is to develop an industry classification which meets the needs of key users. The following objectives will assist in this regard:
- recognition of the changing needs of users of industry data;
- implementation of a purer conceptual framework (that is, a supply side, production function framework);
- identification of new and emerging industries;
- updating industry descriptions to reflect the adoption of new materials, technologies and production techniques; and
- the provision to develop alternate industry views.
International Comparability and Developments.
The North American Industrial Classification System 2002 (NAICS) is the most contemporary industry classification. The ABS and SNZ have agreed to use the top level structure of this classification as a starting point for revising the ANZSIC.
Both countries will also contribute to the review of the International Standard Industrial Classification (ISIC) due for release in 2007. The ABS and SNZ will aim to influence the direction taken by the ISIC review to ensure that the classification is flexible, reflects contemporary circumstances, and is relevant to a broad range of countries. We expect that ISIC 2007 will also be heavily influenced by NAICS (at least at the top level), which should at least ensure high level consistency between ISIC 2007 and ANZSIC 2006.
Impact of the proposed changes.
The revision to ANZSIC will be substantial in some areas. However, the revised version will improve the ease of use of the classification, and will improve the quality of the statistical outputs provided by it. The change to the conceptual basis will result in some industrial activities being classified quite differently. This will require revisions to past statistical series to provide comparable data, that is, there will be a break in statistical time series. Overall however, the revised classification will be a much better reflection of the current economic structure in Australia and New Zealand.
Applying the supply side concept to the construction of the classification will result in changes to the classification of some industries. For example, the Wholesale and Retail definitions will change. This will impact on how businesses are classified into these industries and will affect time series data. Another change proposed for the revised classification includes the introduction of an Information Division that brings together industries that produce and communicate information.
Requirements of Stakeholders
The initial development work has addressed problems with ANZSIC 1993 evident during the ongoing collection, analysis and dissemination of industry statistics. As explained above, the top level structure of ANZSIC 2006 has been agreed to, and the ABS and SNZ are now developing the detailed levels of the classification. Key stakeholders who indicate interest in participating in the review of the detailed level of a division will be contacted when we develop that division.
Input will also be sought from stakeholders on the information required to produce alternate industry views. For further information email economic.classifications@abs.gov.au.
Conceptual Framework of the revised ANZSIC
The conceptual framework of an industry classification can be based on supply or demand side economic principles.
The supply-side concept prescribes that economic units that engage in identical or similar production or service-delivery processes be grouped together into common industry categories. For example, units can be growing vegetables (an agricultural activity at the detailed level) which involves activities such as preparing land, planting, etc. However, an agricultural activity at a broader level could also include other agricultural activities such as sheep farming.
The supply-side concept focuses on production processes which are characterised by the capital equipment involved (e.g. agricultural equipment), material inputs used (e.g. crops, vegetables, animals), and human capital and related intangible inputs (e.g. the type of labour and expertise involved). Therefore at the detailed level there would be a category for vegetable growing and another category for sheep farming as the production processes are different.
In contrast, the demand-side, or commodity-oriented, concept is based on the use of commodities and services. This approach groups together commodities or services that serve similar purposes, that belong together and/or are used together, or that define specific markets.
The supply-side concept provides a more reliable means of recognising new industries created through the use of new technologies, materials, production methods and other factors. In most instances, these industries replace 'old' industries. From a demand-side perspective, this often involves the production of the same good or service using new production processes. The 'substitution' of processes often results in the death of one industry and the emergence of another, but because the product concerned and the market served remains the same, the demand-side concept does not recognise any change.
The current ANZSIC is based on a mix of supply and demand-side economic principles. The following criteria were used as the basis for establishing industry categories:
(i) the character of goods and services produced;
(ii) the uses to which the goods and services are put; and
(iii) the inputs, physical processes undertaken, and the technology of production.
The inputs, processes and technology of production constitute the production function of business activity and is a supply-side concept, whereas the uses to which the goods and services are put is a commodity oriented approach, and is therefore a demand-side concept. The character of the goods and services produced is a by-product of the process of production.
In ANZSIC93, the goods-producing industries (i.e. agriculture, mining, manufacturing, construction) were defined using a supply-side concept, whereas the services-producing industries (e.g. property and business services) were defined using an inconsistent mix of demand and supply-side concepts. The concept applied varies depending on the industry category concerned as there are no guidelines or 'weighting' assigned to them to determine when and how they should be applied. The wholesale and retail trade industries were defined using a demand-side approach – wholesale trade units are considered to serve businesses, whereas retailers serve households.
The absence of a consistent conceptual framework within the current ANZSIC is viewed as a major weakness as it creates anomalies within the classification and generally makes it difficult to use. A consistent approach guides decision-making and provides an overall philosophy for classifying units one way and not another.
The ABS and SNZ have agreed that the revised ANZSIC will be based on the supply-side concept so that there is a consistent approach to industry classification. To the extent feasible, economic units that engage in similar production processes will be classified to the same industry.
North American Industry Classification System (NAICS) 2002 Divisional Structure
This attachment describes the NAICS 2002 division and subdivision structure. The ABS and SNZ has agreed that the NAICS 2002 divisional structure will be used as the basis for the revised ANZSIC.
Divisional Structure
11 Agriculture, Forestry, Fishing and Hunting
21 Mining
22 Utilities
23 Construction
31-33 Manufacturing
42 Wholesale Trade
44-45 Retail Trade
48-49 Transportation and Warehousing
51 Information
52 Finance and Insurance
53 Real Estate and Rental and Leasing
54 Professional, Scientific, and Technical Services
55 Management of Companies and Enterprises
56 Administrative and Support and Waste Management and Remediation Services
61 Educational Services
62 Health Care and Social Assistance
71 Arts, Entertainment, and Recreation
72 Accommodation and Food Services
81 Other Services (except Public Administration)
92 Public Administration
Subdivision Structure
11 Agriculture, Forestry, Fishing and Hunting
111 Crop Production
112 Animal Production
113 Forestry and Logging
114 Fishing, Hunting and Trapping
115 Support Activities for Agriculture and Forestry
21 Mining
211 Oil and Gas Extraction
212 Mining (except Oil and Gas)
213 Support Activities for Mining
22 Utilities
221 Utilities
23 Construction
236 Construction of Buildings
237 Heavy and Civil Engineering Construction
238 Specialty Trade Contractors
31-33 Manufacturing
311 Food Manufacturing
312 Beverage and Tobacco Product Manufacturing
313 Textile Mills
314 Textile Product Mills
315 Apparel Manufacturing
316 Leather and Allied Product Manufacturing
321 Wood Product Manufacturing
322 Paper Manufacturing
323 Printing and Related Support Activities
324 Petroleum and Coal Products Manufacturing
325 Chemical Manufacturing
326 Plastics and Rubber Products Manufacturing
327 Nonmetallic Mineral Product Manufacturing
331 Primary Metal Manufacturing
332 Fabricated Metal Product Manufacturing
333 Machinery Manufacturing
334 Computer and Electronic Product Manufacturing
335 Electrical Equipment, Appliance, and Component Manufacturing
336 Transportation Equipment Manufacturing
337 Furniture and Related Product Manufacturing
339 Miscellaneous Manufacturing
42 Wholesale Trade
423 Merchant Wholesalers, Durable Goods
424 Merchant Wholesalers, Nondurable Goods
425 Wholesale Electronic Markets and Agents and Brokers
44-45 Retail Trade
441 Motor Vehicle and Parts Dealers
442 Furniture and Home Furnishings Stores
443 Electronics and Appliance Stores
444 Building Material and Garden Equipment and Supplies Dealers
445 Food and Beverage Stores
446 Health and Personal Care Stores
447 Gasoline Stations
448 Clothing and Clothing Accessories Stores
451 Sporting Goods, Hobby, Book, and Music Stores
452 General Merchandise Stores
453 Miscellaneous Store Retailers
454 Nonstore Retailers
48-49 Transportation and Warehousing
481 Air Transportation
482 Rail Transportation
483 Water Transportation
484 Truck Transportation
485 Transit and Ground Passenger Transportation
486 Pipeline Transportation
487 Scenic and Sightseeing Transportation
488 Support Activities for Transportation
491 Postal Service
492 Couriers and Messengers
493 Warehousing and Storage
51 Information
511 Publishing Industries (except Internet)
512 Motion Picture and Sound Recording Industries
515 Broadcasting (except Internet)
516 Internet Publishing and Broadcasting
517 Telecommunications
518 Internet Service Providers, Web Search Portals, and Data Processing Services
519 Other Information Services
52 Finance and Insurance
521 Monetary Authorities - Central Bank
522 Credit Intermediation and Related Activities
523 Securities, Commodity Contracts, and Other Financial Investments and Related Activities
524 Insurance Carriers and Related Activities
525 Funds, Trusts, and Other Financial Vehicles
53 Real Estate and Rental and Leasing
531 Real Estate
532 Rental and Leasing Services
533 Lessors of Nonfinancial Intangible Assets (except Copyrighted Works)
54 Professional, Scientific, and Technical Services
541 Professional, Scientific, and Technical Services
55 Management of Companies and Enterprises
551 Management of Companies and Enterprises
56 Administrative and Support and Waste Management and Remediation Services
561 Administrative and Support Services
562 Waste Management and Remediation Services
61 Educational Services
611 Educational Services
62 Health Care and Social Assistance
621 Ambulatory Health Care Services
622 Hospitals
623 Nursing and Residential Care Facilities
624 Social Assistance
71 Arts, Entertainment, and Recreation
711 Performing Arts, Spectator Sports, and Related Industries
712 Museums, Historical Sites, and Similar Institutions
713 Amusement, Gambling, and Recreation Industries
72 Accommodation and Food Services
721 Accommodation
722 Food Services and Drinking Places
81 Other Services (except Public Administration)
811 Repair and Maintenance
812 Personal and Laundry Services
813 Religious, Grantmaking, Civic, Professional, and Similar Organizations
814 Private Households
92 Public Administration
921 Executive, Legislative, and Other General Government Support
922 Justice, Public Order, and Safety Activities
923 Administration of Human Resource Programs
924 Administration of Environmental Quality Programs
925 Administration of Housing Programs, Urban Planning, and Community Development
926 Administration of Economic Programs
927 Space Research and Technology
928 National Security and International Affairs
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