William Cave OECD Statistics Directorate

OECD WP National AccountsOctober 2005

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ISIC Revision 4: Top-top and Intermediate Aggregation Structures

(for SNA data reporting by activity)

OECD proposals

William Cave

OECD Statistics Directorate


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What is ISIC? International Standard Industrial Classification of All

Economic Activities (ISIC) The official activity classification of SNA To classify economic entities (units) according to

activity they carry out Original ISIC 1948 Rev 1 1958, Rev 2 1968, Rev 3 1989 Minor Revision 3.1 2002, Major Revision 4 planned for 2007


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Design principles & priorities for ISIC rev 4 Improve international comparability

– convergence of regional classifications– E.g. NAICS,NACE,JSIC,CSIC,ANZSIC etc– engage more countries & regions in ISIC design – target for international comparability at least 2 digit level

Relevance– Information sector, internet , telecoms – OECD ICT definition– environmental services – new technologies – growing business service sector– health services – tourism – agriculture

Continuity – long time series Level of detail for an international classification?


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ISIC 3 and ISIC 4 top-level

ISIC 3 ISIC 4Top-level sections 17 21Divisions 60 88SNA requests top-top level


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ISIC rev 4: A Top-top Structure? What are SNA needs?

SNA AEG, OECD and Eurostat national accountants have agreed need for top-top structure to ISIC rev 4 of about 10 categories

OECD national accountants proposed that intermediate aggregation of 30-40 categories useful for international comparison within OECD. SNA AEG in Dec 2004 were undecided.

Currently OECD and Eurostat use A6/A17/A31/A60 aggregations of ISIC rev 3 in national accounts questionnaires


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Proposed set of ISIC 4 SNA data aggregations?

A*10/11 top-top A*21 = ISIC rev 4 Sections A*38 = ISIC rev 4 Sections + 17 sub-sections

(intermediate) A*88 = ISIC two digit divisions


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Autumn 2004 set aim to agree top-top and intermediate ISIC 4 aggregations for reporting national accounts data by activity

Initial proposals from Eurostat, UNSD and France OECD analysts raised issues:

– international comparability, relevance, and continuity for long time series analysis;

– the needs of input-output, policy interests, productivity analysis, separately identifying activities that follow different tracks in economic cycle

OECD SNA Industry EDG established to encourage participation Proposals developed in consultation with Eurostat and UNSD

OECD exercise


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Process First OECD proposal circulated February 2005 Revised proposal in light of comments 24 May

– Set out specific questions on most contentious issues Sent to all OECD member national accountants,

EDG, classifications experts, Eurostat, UNSD Reviewed by UNSD Expert Group on Classifications

June 2005 Comments received from 15 countries, Eurostat and

ECB


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Constraints

Preference for following ISIC structure ISIC 4 draft was changed in March and August 2005

– now finalised Some ISIC structural and ordering changes on real

estate and public administration made for top-top Take into account current ISIC 3 aggregations Consider Eurostat A65 draft & US BEA GDP by

industry (~65)


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OECD proposal for Top-top aggregation

ISIC rev 4 sections Description

1 A Agriculture, forestry and fishing

2 B,C,D and E Manufacturing and other industry

2a C Of which: Manufacturing

3 F Construction

4 G, H and I Trade, transport & hotels etc

5 J Information & communication

6 K Financial & insurance

7 L Real estate activities

8 M and N Business services

9 O, P and Q Public admin; education, human health and social work

10 R, S, T and U Other services


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Illustrative v.a. weights for selected countries

Description France US Australia

Agriculture, forestry and fishing 2.5 1.0 3.5

Manufacturing and other industry 19.5 16.0 19.5

Of which: Manufacturing 16.5 12.5 11.0

Construction 5.0 4.5 6.5

Trade, transport & hotels etc 17.5 18.5 20.0

Information & communication 5.0 5.5 5.0

Financial & insurance 5.0 8.0 7.0

Real estate activities 12.0 11.5 10.0

Business services 11.5 11.0 11.0

Public admin; education, human health and social work

20.0 20.5 15.0

Other services 2.0 3.5 2.5


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Responses on top-top

i) Group OPQ and RSTU or ii) O and PQRSTU– i) 9 ii) 7 very close but chose option i)

Support A10/11?– Yes 14, No 2

– Two suggested A12 with mining

– One favoured A10 combine L with MN

– One favoured A6 if to be used for quarterly reporting


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Proposal for intermediate aggregation A*38

1 A Agriculture, forestry and fishing

2 B Mining and quarrying

3 CA Food products, beverages and tobacco

4 CB Textiles, wearing apparel and leather products

5 CC Wood and paper products, and printing

6 CD Coke, and refined petroleum products

7 CE Chemicals and chemical products

8 CF Pharmaceuticals, medicinal chemical & botanical products

9 CG Rubber and plastics products, & other non-metallic mineral products

10 CH Manufacture of basic metals and metal products

11 CI Manufacture of computer, electronic & optical products

12 CJ Manufacture of electrical equipment

13 CK Manufacture of machinery and equipment n.e.c.


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Proposal for intermediate aggregation 2

14 CL Transport equipment

15 CM Other manufacturing and repair

16 D Electricity, gas, steam and air-conditioning supply

17 E Water, sewage, waste management and remediation

18 F Construction

19 G Wholesale and retail trades

20 H Transportation and storage

21 I Accommodation and food service activities

22 JA Publishing, audiovisual and broadcasting activities

23 JB Telecommunications

24 JC IT and other information services

25 K Financial and insurance activities

26 L Real estate activities


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Proposal for intermediate aggregation 3

27 MA Legal, accounting, management, architecture, engineering, technical testing etc

28 MB Scientific research and development

29 MC Other professional, scientific and technical activities

30 N Administrative and support service activities

31 O Public administration and defence

32 P Education

33 QA Human health services

34 QB Residential care and social work activities

35 R Arts, entertainment and recreation

36 S Other services

37 T* Activities of households as employers of domestic personnel

and undifferentiated production of households for own use

38 U* Extra-territorial organizations and bodies


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Issues for intermediate aggregation

Comparable SNA data reporting for Europe, N America and Asia-pacific and preferably wider

Follow ISIC order and hierarchy Consider analytical relevance and continuity ICT, R&D, Energy, Distributive trade Keep approximate A31 level of detail for

manufacturing – for continuity and robustness of data More service activities Eurostat and US A65 levels


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Responses on intermediate proposal Not to break out mining of energy materials

– Yes 9, No 5 Combine Section G Trade divisions into one for international

comparability– Yes 11, No 3

Agree split on human health and social work– Yes 12, No 3

Break out R&D– Yes 13, No 3

Break out manufacturing at about same level as A31– Yes 10, No 1

Keep the group manufacture of transport equipment as in A31– Yes 9, No 4


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Questions and Proposed Next Steps

Can these proposed aggregations be accepted for SNA data reporting? In particular:

Do you agree the A*10/11 proposals are suitable for an ISIC top-top aggregation for SNA data reporting

Do you agree the proposed intermediate A*38 is suitable for SNA data reporting?

Any further comments are invited Subject to delegates views a final OECD paper would be

submitted to ISWGNA in November for consideration by the SNA AEG January 2006

P.S.: Should a standard grouping for service activities be recommended or not?


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Thank you for your attention

William Cave OECD Statistics Directorate

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