Appendix 3 Changes from ANZSIC 1993

The 2006 edition of the ANZSIC reflects a substantial review of all facets of the classification. The first edition of the classification was released in 1993 and there have been significant changes in the Australian and New Zealand economies in that period. Consequently, it is not surprising that the classification has undergone a substantial degree of change. There has been extensive consultation with users in both countries to ensure that the 2006 edition meets their current and emerging needs.

There have been increases in the number of industry categories at each level of the classification as a result of the review. The Industry Categories ANZSIC 1993 and 2006 table compares the number of industry categories at each level of the hierarchy in the 1993 and 2006 editions. It also provides some summary statistics for Australia and New Zealand, using Australian value added data for 1999-2000 (Australian System of National Accounts, cat. no. 5204.0, Nov. 2003) and New Zealand full time equivalent employees for 2003 (New Zealand Business Demographic Statistics, as at February 2003).

The largest percentage increases in the number of categories occurred at the ANZSIC subdivision and group levels (increases of 62 and 35 percent respectively). Changes at each level of the classification, and the major reasons for them are discussed in more detail in the following sections of this appendix.

The summary statistics show how the additional categories in ANZSIC 2006 reduce the average size of aggregate statistics classified by industry, where the two classifications are applied at a common point in time.

ANZSIC 2006 includes 19 divisions, compared with 17 in ANZSIC 1993. The large and diverse Property and Business Services Division in ANZSIC 1993, together with some other services, has been rearranged into three new divisions: Rental, Hiring and Real Estate Services; Professional, Scientific and Technical Services; and Administrative and Support Services; resulting in the net gain of two divisions in ANZSIC 2006.

ANZSIC 2006 Division J Information Media and Telecommunications has been introduced, effectively replacing ANZSIC 1993 Division J Communication Services. The new division brings together classes from a number of ANZSIC 1993 divisions.

The new Information Media and Telecommunications Division groups units mainly engaged in the creation and storing of information products for dissemination purposes; transmitting information products using analogue and digital signals; and providing transmission and storage services for information products. These have been rapidly growing sectors of the Australian and New Zealand economies since the last review. In addition, both sets of changes better align ANZSIC 2006 with the division structures proposed for ISIC. Rev. 4.

Apart from the changes required as a result of the new division structure, several divisions were renamed to better reflect their composition or the terminology in current usage.

ANZSIC 2006 includes 86 subdivisions, compared with 53 in ANZSIC 1993, the largest percentage increase in the number of categories for any level of the classification. This was the result of a number of factors including:

• improving the international comparability of the classification at this level;
• identifying groupings of economic activities with significantly different production functions; and
• promoting some more economically significant industries to this level of the classification.

Individual decisions to create subdivisions took into account all of these factors and were variously influenced by them. To improve international comparability, ANZSIC 2006 was aligned, as far as possible, at the subdivision level with the proposed ISIC. Rev. 4.

Formation of the following subdivisions was particularly influenced by considerations of international comparability:

• Subdivision 12: Beverage and Tobacco Product Manufacturing;
• Subdivision 44: Accommodation;
• Subdivision 55: Motion Picture and Sound Recording Activities;
• Subdivision 58: Telecommunications Services;
• Subdivision 60: Library and Other Information Services; and
• Subdivision 70: Computer Systems Design and Related Services.

Formation of the following subdivisions was particularly influenced by better identifying groupings of economic activities with significantly different production functions:

• Subdivision 02: Aquaculture;
• Subdivision 15: Pulp, Paper and Converted Paper Product Manufacturing;
• Subdivision 26: Electricity Supply;
• Subdivision 27: Gas Supply; and
• Subdivision 94: Repair and Maintenance.

Formation of the following subdivisions was particularly influenced by promoting some of the more economically significant industries to this level of the classification:

• Subdivision 11: Food Product Manufacturing;
• Subdivision 45: Food and Beverage Services;
• Subdivision 77: Public Order, Safety and Regulatory Services; and
• Subdivision 80: Preschool and School Education.

The number of groups increased substantially, from 158 in ANZSIC 1993 to 214 in ANZSIC 2006. The major factors behind this increase were:

• flow on effects from the large increase in the number of ANZSIC subdivisions;
• formation of ANZSIC groups better aligned with the ISIC;
• more homogeneous groupings of production functions; and
• recognising some new groups with relatively high levels of economic significance.

Examples where international comparability was improved by the formation of groups include:

• Group 541: Newspaper, Periodical, Book and Directory Publishing;
• Group 542: Software Publishing; and
• Group 697: Veterinary Services.

Examples where different production functions led to the formation of groups include:

• Group 112: Seafood Processing;
• Group 121: Beverage Manufacturing;
• Group 261: Electricity Generation; and
• Group 262: Electricity Transmission.

Examples of groups formed due to their relatively high levels of significance include:

• Group 372: Pharmaceutical and Toiletry Goods Wholesaling;
• Group 722: Travel Agency Services; and
• Group 852: Pathology and Diagnostic Imaging Services.

The principles for the formation of classes in the 2006 edition of the ANZSIC are set out in the Nature and objectives of the classification section. All of the principles were important contributors to the changes made at the ANZSIC class level between the 1993 and 2006 editions. ANZSIC 2006 comprises 506 classes, compared with 465 in ANZSIC 1993.

Many individual classes in ANZSIC 1993 have been affected by change of some type. In some cases, two or more ANZSIC 1993 classes have been merged to form one class and others have been broken up into more detailed classes.

The composition of many classes has been affected by the formation of different groupings of activities, particularly due to the more rigorous application of production function homogeneity e.g. the new treatment of repair and maintenance activities.

It is difficult to summarise the relative contribution of the various principles to these many changes of varying degrees of significance. Particular principles had more impact in some parts of the classification than others and all of the principles were considered in making decisions on individual ANZSIC 2006 classes.

The Correspondences section provides correspondences (concordances) between ANZSIC 1993 and ANZSIC 2006, and between ANZSIC 2006 and ANZSIC 1993, at the class level. These correspondences indicate how each class in each edition of the ANZSIC relates to the classes in the other edition i.e. class in one edition is comprised of one or more whole or part classes from the other edition.

For example, ANZSIC 1993 Class 2122 Ice Cream Manufacturing is directly equivalent to ANZSIC 2006 Class 1132 Ice Cream Manufacturing. There has been no change in the primary activity composition of the class between the two editions and there is therefore a 1:1 correspondence between the two classes.

As another example, ANZSIC 1993 Class 5730 Cafes and Restaurants has been split into two classes and a primary activity has been moved to a class in another division. ANZSIC 2006 Classes 4511 Cafes and Restaurants and 4513 Catering Services were previously part of ANZSIC 1993 Class 5730. In addition, theatre restaurants have been moved from this class to ANZSIC 2006 Class 9001 Performing Arts Operation. ANZSIC 1993 Class 5730 therefore corresponds to ANZSIC 2006 Classes 4511 and 4513, and part of ANZSIC 2006 Class 9001, a 1:many relationship (1:m).

In the correspondence tables the relationship described above is shown as follows.

The correspondences do not indicate how the actual composition of activities of individual classes has changed between the two editions or how significant those changes are.

By examining the nature of the class level correspondences, it is possible to broadly summarise the relationships between the classes in the two editions. The Class Relationships ANZSIC 1993 to ANZSIC 2006 table summarises the nature of the relationships between the classes in ANZSIC 1993 and ANZSIC 2006 i.e. whether the contents of the class remained the same (1:1), the class was merged with other whole or part classes (m:1), or the class was broken up into two or more whole or part classes (1:m). The figures are provided for each ANZSIC 1993 division.

The table shows that 37 percent of ANZSIC 1993 classes were subdivided and apportioned to two or more ANZSIC 2006 classes. The most significant structural changes at the class level, proportionately, occurred in Division F Wholesale Trade; Division G Retail Trade and Division P Cultural and Recreational Services. However, there was structural change across most of the classification.

Merging of classes occurred where:

• the previously defined industry had fallen below or near the economic significance limit;
• there was limited user interest in the grouping; and/or
• the degree of homogeneity of the individual classes was deficient because of significant secondary activities of units belonging to the other classes.

Class change tables have been prepared showing how each ANZSIC 1993 class was affected by the review and showing where ANZSIC 1993 primary activities are classified in ANZSIC 2006. They indicate whether the ANZSIC 1993 class has been split, merged, changed title, moved divisions etc. The ANZSIC 2006 class includes information about activities moved into or out of the class.

These tables are available free of charge from the ABS web site www.abs.gov.au and from the Statistics NZ web site www.stats.govt.nz.

With the implementation of a substantial revision of a major classification, many users prefer to have historical time series, compiled according to the previous edition of the classification, presented according to the new edition of the classification. The historical series cannot be recompiled on the new basis, rather any breaks in continuity between the old and the new observations are eliminated by quantifying the magnitude of the break and backcasting the series on the new basis.

A number of statistical methods can be applied to represent historical time series data. The size of particular breaks in series will differ for the same classification change depending on the data items involved e.g. the size of a particular break may differ, for example, for series on profits, employment or capital expenditure.

Both the ABS and Statistics NZ will release information explaining, for each series, how the impact of the move to ANZSIC 2006 will be handled, prior to the publication of the series on an ANZSIC 2006 basis.