Registry Detail

1873

Information

24 November 2003

2003 quest. - Summary of ISIC section 03 responses

The proposed two-digit level structure for section 03 "Manufacturing": 3.1 Manufacture of food products, beverages and tobacco products 3.2 Manufacture of textiles, wearing apparel, fur, leather and related products 3.3 Manufacture of wood and of products of wood and cork, except furniture; manufacture of articles of straw and plaiting materials 3.4 Manufacture of paper and paper products 3.5 Printing and reproduction of recorded media 3.6 Manufacture of coke, refined petroleum products and nuclear fuel 3.7 Manufacture of chemicals and chemical products 3.8 Manufacture of rubber and plastics products 3.9 Manufacture of other non-metallic mineral products 3.10 Manufacture of basic metals 3.11 Manufacture of fabricated metal products, except machinery and equipment 3.12 Manufacture of machinery and equipment n.e.c. 3.13 Manufacture of computers, communications equipment, electronic components 3.14 Manufacture of electrical equipment 3.15 Manufacture of transport equipment 3.16 Manufacture of furniture; manufacturing n.e.c.

Summary for section 03 "Manufacturing" Hungary states that converters that do not manufacture themselves should be treated as wholesalers/retailers except if they own the legal right and production concept in which case they should be manufacturers. Australia: they see the logic and consequence of moving Publishing to Information, that only those units that own the input material will be classified in Manufacturing. Owning patents, performing research or managing a brand wouldn't make them manufacturers. For composite products Mexico suggests to use the criterion of the production function and to create for the well-known example of coated/impregnated paper a subcategory under paper manufacturing to assure coherent treatment. Mexico uses this criterion to classify e.g. ropes reinforced by plastic or metallic material. Argentina does not agree with merging divisions 15 and 16, but proposes instead a split of division 15 (Division 3.2) at a higher level. 3.x - merging former 1511+1512+1520: Meat, product of fishing and product of milk (agro industrial of animals (accounts for 11.44% of manufacturing) 3.x+1 - merging former 1513+1514+153+154: Agro-industry of vegetables, crops, fruits, ... (accounts for 13.62% of manufacturing) 3.x+2 former Group 155: Beverages (accounts for 4.83% of manufacturing) 3.x+3 new: Agro-industrial services (is a very important branch, a lot of enterprises are dedicated to offer services like temperature treatment and services to produce oils, juices, meat, etc.) 3.x+4 former Division 16 Portugal proposed the title of manufacturing to be "Manufacturing and gross repair" Austria proposes to create a division for turnkey projects within manufacturing (close to manufacture of machinery) for the reason that the production of complete plants goes far beyond construction. Brazil announced doubts about the repair of ships and aircrafts outside of manufacturing. Germany proposed that film processing should be a manufacturing activity (type of transformation). All kinds of processing of stone (crushing, grinding, cleaning, drying, sorting, mixing) could be considered as manufacturing (Germany). Although not having a position on biotechnology, OECD would like to see discussion on inclusion of biotech activities and whether there are new products that are indistinguishable from "conventional" products The UK suggests to create a top-level category "Pharmaceutical Industry", separated from the rest of the chemical industry, because this industry does not have much in common with the general chemical industry and old-style chemical processes. Spain pointed out that there are establishments specialized in the assembly of parts - usually non-specialized, cheap manpower, performed by physically or psychically handicapped people. They are not specialized in a specific product and operate on a fee or contract basis (e.g. toys, wooden boxes). The question is whether it couldn't be treated as a service like bottling (7482 in NACE, 7495 in ISIC) to avoid reclassification of these establishments from year to year. Afristat mentioned the boundary problem for the first transformation process for agricultural activities. While the preparation of natural textile fibres is already recognized as manufacturing, it's different for the first transformation of agricultural products like cotton ginning, coffee dehusking or rubber drying, which is treated as manufacturing in the WAEMU member states. In case of vertically integrated activities where no assignment according to value-added is possible, an assignment by last step of production (see also Q-01, Afristat) is proposed, maintaining the current exceptions (grapes -> wine, olives -> oil, milk -> cheese) plus adding one more exception: the integrated production of coffee (raw production with processing) to be an agricultural activity. S-03.1: Concerning the boundary question where to place 'fish/seafood processing on fishing boats' the NAICS countries (3) were favouring its classification under food manufacturing, Thailand suggested to follow the value-added criterion and Afristat reported that the general position was to look at the principal activity (if such information is available) and where it is not available, half of the Afristat member countries (18 in this questionnaire) favoured the "final product-approach" (under Manufacturing) and the other half Fishing. Australia did research on this combined activity and pointed out that floating factory ships didn't exist in Australia, but that most undertook minor processes as heading, gutting and chilling/freezing which should be treated as beneficiation processes. Other boundary issues were ice manufacturing which the US suggests to put under beverage manufacturing since the input is the same - treated water, safe for consumption. The commonly combined activity of growing grapes and producing wine should be put under beverage manufacturing as well since manufacturers often use self grown and purchased grapes for the final product (USA). Spain brought up the problem of classifying bakery stores that offer 'just made' bread (from purchased, frozen dough). It's proposed to treat them as retailer as long as they don't have an oven and make the dough themselves. S-03.2: To the boundary question for e.g. rubber wet suits (more general the boundary between S-03.2 S-03.8), Australia, Thailand and Mexico suggested to go by activity first and only if it is impractical to find a place, to use the input based division 3.8. Australia suggests to move these input-oriented categories towards the end of Manufacturing to make clearer that it is rather a residual category. Hungary finally underlined that the delineating criterion between 3.2 and 3.8 should be whether the rubber wear is manufactured by sewing (3.2) or not (3.8; e.g. welding, dounding). See also 3.8. S-03.3: To the boundary question for the place of handles of umbrellas and canes, blocks for smoking pipes, Australia and Hungary clearly stated that it is still a significant wood manufacturing activity (in terms of process) to get such a product. The US proposed that the next level of wood manufacturing should be based on the processes, e.g. sawmills vs. manufacture of purchased, milled lumber. S-03.4: The structure paper offered the option to merge 3.4 and 3.5 (Paper Manufacturing and printing): 3 countries were pro-merging, 3 against it. The US proposed to use the production process as the defining criterion for the next level of detail, recognizing e.g. paper mills separately from establishments that purchase paper for further processing. ISIC 4 should allow for the evolution of various packaging materials (films, laminates of paper, plastic, foil, etc.). Canada mentioned tar papers, asphalt saturated mats and felts (from purchased input materials) which they classified under Petroleum and Coal Products Manufacturing. Australia wants to see more discussion on the boundary issue of coated/laminated paper and argued that possibly the coating is the most important part of the final product. See also S-03 for the standpoint of Mexico on composite products. S-03.5: Concerning the question of the scope of printing/mass reproduction the NAICS countries (+Thailand) preferred having only printing (on paper, glass, plastics, etc.) in 3.5 and mass reproduction onto magnetic/optical media out, while Hungary proposed to create "Other reproduction" on a lower level of section 3.5. S-03.6: We received 3 comments (USA, Canada, Hungary) on the treatment of nuclear fuel on the one hand and asphalt, asphaltic materials on the other. All three countries suggested removing 'nuclear fuel' from this division and place the smelting and refining of uranium (or primary processing of other similar metals as thorium, monazite and other potential nuclear fuel) under 3.9 (Primary Metal Manufacturing) and the enrichment of uranium under 3.7 (Manufacture of chemicals). Reprocessing of spent nuclear fuels was proposed by the US to be in 3.7 as well (noting that reprocessing is not done in the country, that there is only final storage of radioactive waste); Hungary suggested that radioactive waste treatment should move to the waste management services (Section 16). The second issue, raised by the US and Hungary, was asphalt - which is a residual of petroleum manufacturing - that should be found in 3.6, while asphalt-paving mixtures should belong to the non-metallic mineral products (3.9). S-03.7: The boundary issue of the manufacture of toner and ink-jet cartridges should be classified under 3.7 (supported by NAICS countries, while Thailand prefers 3.13). Thailand is also in favour of placing refilling of ink-jet cartridges in Repair and maintenance (which is according to Canada's response too small to play a big role). To move the manufacture of blank CD's etc. to 3.13 was supported by the NAICS countries, Thailand and Hungary. Candles and tapers should become part of 3.7 (Germany) and Hungary proposed to leave matches in 3.16 and include film under 3.7 (agreement from Thailand). The UK suggests to create a top-level category "Pharmaceutical Industry", separated from the rest of the chemical industry, because it would not have much in common with the general chemical industry and old-style chemical processes. See also S-03.6 (nuclear fuel). S-03.8: For the boundary of rubber and plastic apparel, see 3.2. The US also mentioned various items like curlers, resilient floor coverings and plastic parts of footwear that should be included in 3.8, while inflatable rubber boats, plastic boats and inflatable mattresses should be excluded. S-03.9: To the question about precious and semi-precious stones for jewellery, the 4 countries that commented this issue, recommended the inclusion of manufacturing of (semi-)precious stones in 3.9. However, Thailand replied that a distinction between manufacture of stones for jewellery and manufacturing of jewellery (3.16 Manufacturing, n.e.c.) has to be made. S-03.10: Those countries (Hungary, Mexico, Thailand, USA) commenting on the vertically integrated establishments like wire-drawing plants that produce wire and final products (e.g. shopping carts, coat hangers) agreed on the use of the basic production (downstream) as the main criterion rather than the final product. S-03.11: Germany raised the question of (small) arms and ammunition, which would currently be under Manufacture of machinery and equipment n.e.c (Division 29; parts of class 2927 and Section 3.12 in ISIC 4 structure draft), while NAICS classifies them as Fabricated Metal Product Manufacturing (see NAICS 332994). The proposal is to follow the NAICS interpretation. The US proposes to merge 3.11 and 3.12 because of definitional differences between these sections while excluding household appliances from the common Section. Canada proposes to adopt NAICS subsector 332. S-03.12: While the US would merge 3.11 and 3.12 and exclude household appliances from the common Section, Mexico wants to include domestic appliances in 3.12. For resolving the boundary conflict between Special Purpose Machinery and Transportation Equipment Mexico proposes a delineation by use, i.e. whether intended to move people or freight from one place to another or whether its use in the process of another activity (agriculture, mining, construction). Mexico and Thailand want to include non-electric office machinery and equipment in this division, while including the installation of electric systems in buildings in Construction. S-03.13: Brazil pointed out that the change in the classification criterion from use of machinery to production process would cause many allocation problems and suggests to make conventions to facilitate the transition. Mexico proposes to interpret "electronic components" as being simple, basic parts that are used to become part of a household appliance, a computer or communication equipment. The installation of mainframe computer networks should be a treated as a service (Thailand sees it as integral part of 3.13), while watches and parking meters should be part of 3.13. To the kitchen facilities with additional features based on advanced technology all responses showed agreement that the basic function would still be the one of a kitchen facility. Including "electronics" provides often only complimentary, but not the main/basic function of the appliance. The US suggested a proxy for differentiation between electrical and electronic: full voltage (wall voltage or higher) vs. less than full voltage. As a matter of fact capacitors used in high vs. low voltage circuits would usually be manufactured by different establishments using different technologies. This would include measuring, testing and controlling equipment in particular electro-medical analytical equipment that should be identified separately in this division (e.g. magnetic resonance and computer tomography scanning, ultrasound-scanning equipment). Hungary points out that this breakdown of the manufacture of electrical/electronic products is product oriented and that a definitional change could have negative impact on the links to CPC and HS. Furthermore, many appliances have electronic parts that are often delivered by others while the manufacturing and assembling of the electric appliances contributes the most value-added. It is proposed to use CN (remark: in the international case it would be HS) for ensuring the correspondences. Instead of going by the main function (e.g. Office Machinery) it would not make sense to classify by the existence or non-existence of built-in electronics parts - these criteria could be applied further on. S-03.14: Germany proposes to widen the scope of Manufacturing of electrical equipment and include manufacturing of power-driven hand tools, electrical arc and resistance welding machines, electrical industrial furnaces and ovens and electrical and electronic equipment for motor vehicles. Finland proposes to include watches and clocks in 3.14 while instruments and controlling/regulating apparatus should be in 3.13. Hungary suggests to follow HS and classifying by the main function of a product. The main purpose for users is the mechanization of a process and whether data processing systems are included or not is less relevant. To go by use would also have the advantage in accounting purposes where electronic/electric is of less interest than the function (main characteristics) of the machine. S-03.15: To the question of merging divisions 34 and 35 one country said yes (Mexico) another no (Brazil). Thailand proposes to focus on the products for inclusion and exclusion from 3.15 and the US goes in the same direction stating that providing parts to the automobile industry has become a highly specialized industry and that material inputs (textiles for interior, plastics, pumps, electrical equipment) is no longer a reliable classification variable. These parts should be included in 3.15 since these establishments are in most cases specialized as suppliers to the automobile industry exclusively. S-03.16: Concerning the movement of non-electrical optical instruments, mechanical office equipment US and Australia favoured the classification as Manufacture of fabricated metal (3.11) or machinery (3.12). The US pointed out that more discussion is needed whether for a variety of things 3.16 is the right division. Finland points out that furniture manufacturing is a considerable division in every economy and that therefore it should be identified separately from the residual category. Germany proposes to have specific seats (for motor vehicles, for railway coaches, for airplanes, hydraulic barbers' and dentists' chairs) not as part of furniture. Action required: - A decision has to be found whether to merge divisions 3.4 and 3.5 (3 countries pro, 3 against this suggestion) - There is a proposal to introduce a division "turnkey projects" within Manufacturing, - another proposal wants to create a "Pharmaceutical Industry", different from chemical Manufacturing - 3 countries proposed to remove Manufacturing of nuclear fuel from 3.6, which would have to be reflected in the title. - There are some far-reaching decisions concerning boundary questions that have to be addressed: Portugal suggested to rename the whole Section to 'Manufacturing and gross repair' (depends on decision on Repair and Maintenance) There is a proposal to keep the 'electronic components' out of 3.13, but putting them instead in 3.14. There is a question whether electronic/electrical equipment for motor vehicles should be placed in 3.13 and 3.14, respectively.