ESA/STAT/AC.94/4

11 December 2003

UNITED NATIONS

DEPARTMENT OF ECONOMIC AND SOCIAL AFFAIRS

STATISTICS DIVISION

 

Meeting of the Expert Group on

International Economic and

Social Classifications

New York, 8-10 December 2003

 

 

 

 

Final report

 

 

A.        Introduction

1.      The Meeting of the Expert Group on International Economic and Social Classifications was convened in New York on 8-10 December 2003 at the request of the United Nations Statistical Commission. The Statistical Classifications Section of the Economics Statistics Branch of the United Nations Statistics Division organized the meeting. 32 experts participated in the meeting.. The 32 participants from 16 countries and 7 international organizations represented both users and custodians of classifications.

 

2.      The meeting was chaired by Mr. Ivo Havinga, Chief of the Economics Statistics Branch of the United Nations Statistics Division (UNSD) and was conducted along the adopted Provisional Agenda set out in ESA/STAT/AC.94/1.  The documents available at the meeting are listed in ESA/STAT/AC.94/2[1].

 

3.      The meeting had several objectives: to fostering collaboration and coordination within the family of international economic and social classifications; to discuss and review the proposals for the upcoming revisions of International Standard Industrial Classification of All Economic Activities (ISIC) and the Central Product Classification (CPC); to review the developments and experiences in the recent revisions in the family of health classifications, to discuss the procedures for the planned revisions of the International Standard Classification of Occupations (ISCO) and the Standard International Trade Classification (SITC); and to address the implementation of international economic and social classifications.

 

4.      The Chair, in his opening remarks highlighted the necessity of establishing clear mechanisms of coordination for the Expert Group to fulfill the mandate given by the United Nations Statistical Commission as the central coordinating body in the field of classifications. He noted the extended scope of discussions at this meeting, as compared to the previous meetings, giving more emphasis to issues related to social classifications. He also addressed the organization of the classifications revisions and their place in the larger framework of current revisions encompassing the System of National Accounts and the Balance of Payments.

B.  Background

5.      The work on international economic and social classifications has recently been on the agenda of the United Nations Statistical Commission on an annual basis, underlining the importance of this work.

 

6.      At its thirty-second session held in March 2001, the Statistical Commission, recognizing that the Expert Group has consistently addressed work done on the economic classifications within the “family”, requested that the social classifications play a more integral role in the work of the Expert Group.  In particular, it recommended that the Expert Group explore ways to better involve the custodians of this group of classifications.

 

7.      At its thirty-fourth session in March 2003, the Statistical Commission agreed to the continuation of the consultation process on ISIC and CPC involving countries through questionnaires, meetings and workshops, agreed to the need of a concepts paper to provide a conceptual basis for the revision of ISIC and CPC, reiterated its expectation of a positive outcome of the convergence effort between the General Industrial Classification of Economic Activities within the European Communities (NACE) and the North American Industry Classification System (NAICS), and requested that the timetable for the revision of the International Standard Classification of Occupations (ISCO) be reviewed.

C.  Conduct of the meeting

8.      The meeting was organized in session reviewing progress reports on work done on several classifications in the Family of International Economic and Social Classifications, proposals for future actions as well as reports prepared on request of the Experts Group. Participants provided input through papers prepared and oral interventions.

 

9.      The United Nations Statistic Division presented on the work carried out since the last expert group meeting, including the work on the ISIC and CPC revision in connection with the Technical Subgroup of the Expert Group.

 

10.  The Expert Group received reports on the work plans for the revisions of the Standard International Trade Classification (SITC) and discussed implications of this process for other classifications, such as the CPC or the Classification by Broad Economic Categories (BEC).

 

11.  The National Accounts Section of UNSD provided an update of current work carried out in the revision process of the 1993 System of National Accounts, concentrating on areas that may affect classifications discussed by the Expert Group. This presentation highlighted the strong link between the different revision processes on frameworks like the System of National Accounts or the Balance of Payments and classifications revisions, underlining the strong need for cooperation and information exchange between these processes.

 

12.  The International Labour Organization reported on the outcome of the recent International Conference of Labour Statisticians, which had addressed the issue of a revision of the International Standard Classification of Occupations. This issue was also discussed at the last meeting of the Statistical Commission. The Expert Group was invited to discuss the revision process and cooperation with ILO in this project.

 

13.  The UNESCO Institute for Statistics reported on its work on the implementation of the International Standard Classification of Education. The discussion also highlighted problems shared by the implementation of other social classifications, where the main contact partners in the countries are not the national statistical offices, underlining the need for collaborative arrangements between functional line ministries and national statistical offices.

 

14.  The Demographic and Social Statistics Branch of UNSD reported on the developments and future consultation plans for the International Classification of Time Use Activities.

 

15.  The World Health Organization reported on its work on the WHO Family of International Classifications through a telephone conference.

 

16.  The Technical Subgroup of the Expert Group presented a report, based on previous requests by the Expert Group, on work carried out for the ISIC and CPC revision. This included the structure draft for the revised ISIC Rev.4, as well as a proposal for the work programme for the remaining steps in the 2007 revisions

 

17.  The Food and Agriculture Organization (FAO) announced the start of a revision of the classifications used in FAO and requested the support of the Expert Group in this endeavour.

 

18.  Individual countries supported the discussion on implementation of classifications through the presentation of national experiences.

 

19.  As result of the discussions of the meeting, the experts arrived at the following main conclusions and recommendations.

D.  Conclusions and recommendations

Family of International Economic and Social Classifications

1.      The Expert Group noted the work done by UNSD, in cooperation with the Technical Subgroup and with other agencies. The Expert Group re-confirmed the UNSD Classifications Website as an important tool for distributing information on classifications.

 

2.      The Expert Group recommended that the Taskforce on International Trade in Services, when revising the Extended Balance of Payments Services Classification (EBOPS), take note of the CPC revision schedule, note the focus on the improvement of detailed service products, and consider carrying out the revision in consultation with the Technical Subgroup in order to maintain or improve the relationship between the EBOPS and the CPC. The Expert Group recommends that EBOPS be subsequently introduced as a member of the Family.

 

3.      The Expert Group recognized the need for further work on the Classification by Broad Economic Categories (BEC), including a possible extension of the BEC to the services area, considering links to the CPC and COICOP.

Revision of SITC

4.      The Expert Group took note of the plans to revise the Standard International Trade Classification (SITC) and agreed to the need for such a revision. While realizing that the expertise for this revision lies in existing groups, such as the Expert Group on International Trade, the Expert Group noted that the organization of this revision takes place in bodies not related to the Expert Group, which makes it difficult for the Expert Group to carry out the mandate given to it by the UN Statistical Commission. Contacts with the Task Force on International Merchandise Trade Statistics need to be established.

Revision of ISCO-88

5.      The Expert Group took note of the Report of the 17th International Conference of Labour Statisticians, which recommended that the International Standard Classification of Occupations (ISCO-88) be updated and improved. The recommendation that the main structure of ISCO should not be changed in this revision was supported.

 

6.      The Expert Group recommended that the work to update and improve ISCO should be carried out under its guidance. A Technical Subgroup should be formed to do a technical review of the classification and prepare drafts for a revised classification, which should then be presented to the Expert Group for endorsement. The Expert Group should in cooperation with ILO select suitable experts for participation in this Technical Subgroup.

 

7.       The Expert Group recommended that the revision process of ISCO follow a model similar to the ISIC revision process, involving countries through questionnaires and regional workshops. The possibility of organizing workshops on ISCO and ISIC/CPC back-to-back or with a joint session should be further explored.

Educational classifications

8.      The Expert Group recommended that the classification and reporting of non-traditional educational and/or recreational and life-long learning activities should be addressed and solved. The UNESCO Institute for Statistics (UIS), Eurostat and ILO should be involved in this task.

Agricultural classifications

9.      The Expert Group took note of FAO’s work plan for revising the classifications of agricultural activities and products. The Expert Group supports this work and urges close cooperation with parties involved in the ISIC and CPC revision. This cooperation will enhance application of ISIC and CPC for agricultural statistics. Through this work, the FAO will take the lead in a follow-up review of the current proposed ISIC and CPC structure and detail in consultation with the Expert Group and Technical Subgroup.

Family of International Health Classifications

10.  The Expert Group took note of the work carried out by the World Health Organization on the Family of International Health Classifications. Experiences in implementation of the classifications and setting up corresponding mechanisms should be shared with other custodians.

Revision of ISIC

11.  The Expert Group accepted and endorsed the proposals put forward by the Technical Subgroup regarding the conceptual issues underlying the ISIC revision and suggested improvements for the descriptions of these principles. It was agreed that:

-         ISIC will remain a classification of economic activities, i.e. related to the production of goods and services as covered in the System of National Accounts (SNA);

-         Some exceptions will be made to allow for classification of statistical units for other related purposes, such as business registers. There will also be certain cases, where economic production outside the boundaries of the 1993 SNA will be included in ISIC. This will be limited to few cases, such as activities related to patented entities and subleases;

-         ISIC categories and their descriptions will be based on activities. This will make ISIC more independent of specific organizational situations in countries and avoid ambiguity of language;

-         Recommendations regarding statistical units and their identification, consistent with the SNA remain in place. The treatment of ancillary units will follow the recommendations of the SNA, which are currently under review. If the current SNA treatment remains, a coding option using secondary codes for ancillary units will be recommended;

-         ISIC will continue to use the criteria of input, process and output for the definition of classes. However, the revision of ISIC will focus on the production function as a conceptual underpinning within the constraints of relevance, comparability, and continuity;

-         Value added will be the criterion used to identify the primary activity of a unit that carries out multiple activities, even in the case of vertical integration.

 

12.  The Expert Group reviewed a high-level structure proposal for ISIC Rev. 4, prepared by the Technical Subgroup.  After requesting clarification on a number of issues, the structure shown in the Annex was approved for submission to the Statistical Commission.  This structure proposal is expected to form the higher-level structure of ISIC Rev. 4 but will be open to needed changes or revisions that may result from the further analysis of the more detailed levels of the classification. 

 

13.  The Expert Group, acknowledging the importance of the separate identification of specialized repair and maintenance units and the desire to retain a grouping equivalent to division 50 in ISIC Rev. 3.1, recommended a compromise to resolve concerns related to the creation of a section for repair and maintenance activities in ISIC Rev. 4.  A majority of questionnaire responses noted the importance of separating specialized repair and maintenance units from other manufacturing units.  A large proportion of responses also expressed the desire to maintain a grouping equivalent to ISIC Rev. 3.1 division 50.  The compromise creates a separate division within the manufacturing section for specialized units repairing capital machinery, leaves the repair and maintenance of motor vehicles with the wholesale and retail trade of motor vehicles, and moves specialized repair and maintenance units for consumer and household goods to the Other services section in ISIC Rev. 4.

 

14.  With respect to support services, the Technical Subgroup had recommended that support services specific to certain sections be grouped at the division level, with possible further subdivision reflecting additional industry breakdowns in those sections. The majority of questionnaire responses also supported this. However, arguments have been raised to group these support services closer to the activities they serve, i.e. at group level or lower, to allow valuation at division level for activities including relevant support activities. Agricultural support services have been identified as an area needing more research in this case. In other cases, e.g. education, the volume of support services does not seem to warrant the creation of a separate division, but the support services should nonetheless be separated from the activities they serve. This issue will be reviewed during the development of the lower level detail of the classification.

 

15.  The 2-digit level (in the attached structure) should serve as the minimum level for international comparability and countries are encouraged to ensure that data produced according to their national classification can be cleanly aggregated to those categories.

 

16.  The Expert Group noted that the proposed ISIC Rev. 4 higher-level structure reflects improvements to the classification that are useful and relevant and also improve the comparability of industrial classifications in use throughout the world.

 

17.  The Expert Group directed the Technical Subgroup to consider remaining boundary issues in the context of improvements to ISIC.

 

18.  The Expert Group endorsed the development of approximately 10-item aggregation of the 21 sections in the ISIC Rev. 4 structure. This aggregation will not be part of the regular ISIC structure, but presented as an alternate aggregate, which provides guidance for dissemination of highly aggregated industry data. Needs of different applications may result in different possible aggregates. Only one aggregate will be published to support dissemination and analysis of SNA data. This aggregation will be developed in consultation with the ISWGNA.

Revision of CPC

19.  The Expert Group accepted that scope of the CPC be limited to produced goods and services.

 

20.  The Expert Group agreed that the main structure of the CPC not be changed for the revision in 2007. Options for an industry-of-origin approach and a demand-based approach will be considered for future revisions, following research work done for other classifications.

 

21.  A review of the detail of the CPC will be undertaken, taking into account the updated versions of the Harmonized System and the Balance of Payments Classifications. FAO will play an important role in further developing the part related to agricultural products. Special attention will be paid to improving the detail of the services part of the CPC for instance by incorporating price-determining characteristics. The capability of the CPC to act as a guiding tool for the development of detailed product lists needs to increased.

Implementation of classifications

22.  The Expert Group agreed that continuity in classifications work is of extreme importance for all national statistical offices and other custodians of national classifications. If the creation of a dedicated classifications or standards unit is not feasible, the identification and appointment of focal points for classification issues are strongly recommended. These should serve as informants for national users of the classifications and as contacts to the international custodians.

 

23.  The Expert Group agreed that bilateral cooperation is an important tool for the implementation of classifications, with the international agencies functioning as moderators and coordinators. National classifications experts should also act as resource persons for international classifications workshops.

 

24.  To better coordinate and increase awareness of training opportunities on classification issues, the Expert Group recommends the creation of an Inventory of Classifications Activities. This would initially cover the activities of custodians of international reference classifications and then be extended to include those of countries, providing information on activities being undertaken with regard to the different classifications, showing where resources and expertise are located and which agencies undertake specific classifications projects, including training. This would not only allow for better sharing of information, but also ensure more effective use of resources.

Organization of work

25.  The Expert Group agreed to the work plan for further steps in the ISIC and CPC revision process, as being put forward by the Technical Subgroup. The date of the next Expert Group meeting has been set for June 2005, to allow sufficient time for the preparation of the final documents on ISIC Rev.4 and CPC Ver.2 for submission to the Statistical Commission.


Annex 1.         Draft structure ISIC Rev.4 with links to ISIC Rev.3.1

This structure shows links to the current ISIC Rev.3.1, without listing small boundary questions. The links shown here are essential and should be sufficient for comparison of data at this level.

 

Section/Division

Title

Link to ISIC Rev.3.1

Comments

A

 

Agriculture, Hunting, Forestry and Fishing

 

 

 

01

Agriculture

011-013

 

 

02

Forestry and logging

02*

Except support services

 

03

Fishing and aquaculture

05*

Except support services

 

04 *

Support service activities for agriculture, forestry, hunting and fishing

 

014*, 015*, 02*, 05*

See 1/; Except landscaping

B

 

Mining and quarrying

 

 

 

05

Mining of coal and lignite; extraction of peat

10*

Except support services

 

06

Extraction of crude petroleum and natural gas

111

 

 

07

Mining of metal ores

12*, 13*

Except support services

 

08

Other mining and quarrying

14*

Except support services

 

09

Mining support service activities

 

10*, 112, 12*, 13*, 14*

 

C

 

Manufacturing

 

 

 

10

Manufacture of food products

151-154

Includes manuf. of iodized salt from old chemical division

 

11

Manufacture of beverages

155

 

 

12

Manufacture of tobacco

16

 

 

13

Manufacture of textiles

17*

Except 173

 

14

Manufacture of wearing apparel

181, 182*, 173*

Excludes dressing and dyeing of fur

 

15

Manufacture of leather and related products

182*, 19

Includes dressing and dyeing of fur; excludes rubber and plastics shoe parts (in 23)

 

16

Manufacture of wood and of products of wood and cork, except furniture; manufacture of articles of straw and plaiting materials

20

 

 

17

Manufacture of paper and paper products

21

 

 

18

Printing and reproduction of recorded media

222, 223

 

 

19

Manufacture of coke and refined petroleum products

231, 232

 

 

20

Manufacture of chemicals and chemical products

24 (exc. 2423), 233*

(233* = enrichment of uranium)

 

21

Manufacture of pharmaceuticals

2423

 

 

22

Manufacture of rubber and plastics products

25

 

 

23

Manufacture of other non-metallic mineral products

26

 

 

24

Manufacture of basic metals

27, 233*

(233* = smelting and refining of uranium)

 

25

Manufacture of fabricated metal products, except machinery and equipment

28

Except repair

 

26

Manufacture of machinery and equipment n.e.c.

291, 292, 30*

Except repair

 

27

Manufacture of computers, communications equipment and electronic components

30*, 31*, 32*, 33*

Except repair

 

28

Manufacture of electrical equipment

293*, 31*, 321*, 33*

Except repair

 

29

Manufacture of motor vehicles

34

Except repair

 

30

Manufacture of other transport equipment

35

Except repair

 

31

Manufacture of furniture

361

Except repair

 

32

Manufacturing n.e.c.

 

293*, 369, 30*, 331*, 332*, 333*, 3599*

See 2/

 

33

Repair and maintenance of machinery and equipment

 

28*, 29*, 31*, 33*, 35*, 36*, 7250*

Repair portions only

D

 

Utilities

 

 

 

34

Utilities

 

40

See 3/

E

 

Water supply; sewerage, waste management and remediation activities

 

 

 

35

Water collection and supply

41

 

 

36

Sewerage

90*

 

 

37

Waste collection, treatment and disposal activities

233*, 37, 90*

233* = treatment of radioactive waste

 

38

Remediation activities

 

90*

 

F

 

Construction

 

 

 

39

Construction of buildings

452*

 

 

40

Civil engineering

452*

 

 

41

Specialized transversal trades

 

451, 453, 454, 455

See 6/

G

 

Trade

 

 

 

42

Wholesale and retail trade and repair of motor vehicles and motorcycles

50*

Excludes sale of automotive fuel

 

43

Wholesale trade

51

 

 

44

Retail trade

 

505, 52 (except 5260)

 

H

 

Transportation and storage

 

See 5/

 

45

Land transport; transport via pipelines

60

 

 

46

Water transport

61

 

 

47

Air transport

62

 

 

48

Supporting and auxiliary transport activities

63 (except 6302, 6304)

 

 

49

Warehousing and Storage

6302

 

 

50

Postal and courier activities

 

641

 

J

 

Accommodation and Food service activities

 

 

 

51

Accommodation

551

 

 

52

Food service activities

 

552

 

K

 

Information and communication

 

 

 

53

Publishing activities

2211, 2212, 2219, 7221, 7240*

 

 

54

Motion Picture and sound recording activities

2213, 9211, 9212

 

 

55

Broadcasting

7240*, 9213

 

 

56

Telecommunications

6420*

 

 

57

Information technology service activities

7210, 7229, 7230, 7290

 

 

58

Internet service providers and web search portals and other information service activities

 

6420*, 7240*, 7499*, 9220, 9231

From 74: telephone based information services

L

 

Financial and insurance activities

 

 

 

59

Financial intermediation, except insurance and pension funding

65*

Except leasing of intangible assets

 

60

Insurance and pension funding, except compulsory social security

66

 

 

61

Other financial activities

 

67

 

M

 

Real Estate, rental and leasing activities

 

 

 

62

Real estate activities

70

 

 

63

Rental and leasing

 

71, 6599*

 

N

 

Professional, Scientific and Technical Activities

 

 

 

64

Legal and accounting activities

7411, 7412

 

 

65

Architecture and Engineering activities; technical testing and analysis

7421, 7422

 

 

66

Management and management consultancy activities

7414*

 

 

67

Research and development

73

 

 

68

Advertising activities

743

 

 

69

Other professional, scientific and technical activities

 

7413, 7494, 7499*

 

O

 

Administrative and support service activities

 

 

 

70

Office administrative service and business support activities

7499*

 

 

71

Employment activities

7491, 9249

Excludes agents for individual artists

 

72

Activities of travel agencies and tour operators and other reservation service activities

6304, 9214*, 9219*, 9241*, 9249*

Only ticket sales from 92

 

73

Investigation and security activities

7492

 

 

74

Services to buildings

0140*, 7020, 7493, 7514*, 9000*

From 0140: landscaping; from 90: extermination, street sweeping etc.; Includes operation of government owned buildings

 

75

Other Support activities

 

7495, 7499*

 

P

 

Education

 

 

 

76

Education

80

 

 

77

Education support activities

 

7414*, 7499*

See 4/

Q

 

Health and Social Work

 

 

 

78

Human health and social work activities

851, 853

 

 

79

Veterinary activities

 

852

 

R

 

Arts, entertainment and recreation

 

 

 

80

Dramatic arts, music and other arts activities

921*

Except activities moved to section K

 

81

Museums activities, preservation of historical sites, botanical and zoological gardens and nature reserves activities

9232, 9233

 

 

82

Gambling and betting activities

9249*

 

 

83

Other entertainment, sports and recreation activities

 

9241*, 9249*

Except ticket sales, gambling, casting agencies

S

 

Other Service Activities

 

 

 

84

Activities of membership organizations

91

 

 

85

Repair of computers and household goods

5260, 7250*

 

 

86

Other service activities

 

93

 

T

 

Public administration and defence; compulsory social security

 

 

 

87

Public administration and defence; compulsory social security

 

75*

Except operation of facilities and programmes

U

 

Activities of house holds as employers; undifferentiated goods- and services-producing activities of households for own use

 

 

 

88

Activities of households as employers of domestic personnel

95

 

 

89

Undifferentiated goods- and services-producing activities of private households for own use

 

96, 97

 

V

 

Extraterritorial organizations and bodies

 

 

 

90

Extraterritorial organizations and bodies

 

99

 

 

 

Notes:

 

1/         The issue of whether these support activities should be identified at the division level (as shown here) or, split into support services for agriculture, for forestry and for fishing, at the respective group levels, will be further discussed.

 

2/         The complete reorganization of old ISIC divisions 29-33 into the new divisions 27-29 will result in a set of activities that do not fit into 27-29 and therefore move to 32. Example: non-electric measuring instruments, non-electric domestic appliances.

In addition, some items of old division 36, which can be clearly attributed to individual material components, such as wood blocks for pipes, will be allocated as wood products etc. (These will typically be noise items, but allow for alignment with NAICS in those cases.)

 

3/         Brokers remain here.

 

4/         While this division is small, these service activities should be separated from “real” education activities to allow for an aggregation item for “real” education. This cannot be done at the next (group) level.

 

5/         For transportation, split by passenger and freight transportation will be used at the group level.

 

6/         Final content of this division relative to divisions 39 and 40 has to be decided.

 



[1]    See http://unstats.un.org/unsd/class/intercop/expertgroup/2003/ac94-2.htm