NEWS FROM ONS


Changes to the UK Standard Industrial Classification

Introduction 

An industrial classification provides a framework for the collection, tabulation, presentation and analysis of data and its use promotes homogeneity. In addition, it can be used for administrative purposes and by non-government bodies as a convenient way of classifying industrial activities into a universal structure.

NACE is the European Union’s classification system for economic activities. The acronym NACE means the ‘Nomenclature generale des activites economiques dans les Communautes europeennes’, although today it is known in all Member States simply as ‘NACE’.

Classification systems need to be revised periodically because, over time, new products, processes and industries emerge. The economic activity classification systems in EU Member States are required by European law to be identical to NACE down to and including the 4-digit Class level. National systems also contain a 5-digit Subclass level determined at the national level, each Member State having a different set of Subclasses. The UK Standard Industrial Classification is, then, identical to NACE at the Class level and above and also includes a number of 5-digit Subclasses.

Here is an example of the various levels of the UK SIC:

DIVISION 15
Manufacture of food products & beverages
GROUP 15.5
Manufacture of dairy products CLASS 15.51
Operation of dairies and cheese making
SUBCLASS 15.51/2
Butter and cheese production

SIC 2003

A new SIC, SIC(2003), has just been introduced, replacing earlier versions. Implemented on 1st January 2003, the Standard Industrial Classification of Economic Activities 2003, UKSIC(2003), is a minor revision of the previous version of the SIC, released in 1997. It was necessitated by the latest revision of the European Community classification system NACE Rev.1.1. The UK also took the opportunity to respond to user demand for more detail at the 5-digit subclass level.

Here is a summary of the main changes between SIC(2003) and the previous version of the SIC:

• A breakdown of class 29.40 (manufacture of machine tools) into 3 classes: portable hand-held, metalworking and other.
• A breakdown of class 40.10 (production and distribution of electricity) into 3 new classes, one for manufacture, one for transmission and one for distribution and trade.
• A breakdown of class 40.20 (manufacture of gas; distribution of gaseous fuels through mains) into 1 class for manufacture, and one for distribution and trade.
• A breakdown into two new classes each, of classes 51.64 (wholesale of office machinery and equipment) and 51.65 (wholesale of machinery for use in industry, trade and navigation).
• A new class for call centre activities.
• A new class for publishing of software.
• A breakdown of class 90.00 (sewage and refuse disposal, sanitation and similar activities) into three classes for collection and treatment of sewage, collection and treatment of other waste and for sanitation, remediation and similar activities.
• In response to user demand for a more detailed coding structure within the UK, the introduction of 41 new 5-digit subclasses.

For all subclasses, whether new or already available, the balancing or not elsewhere classified subclass is numbered as a /9. For example, ‘Manufacture of other containers’ is coded as 21.21/9.

In some cases, the creation of new subclasses left the balancing subclass, as previously numbered, in the middle of a list of specific subclasses. Consequently, when the balancing subclass was moved and renumbered as /9 a space was created at the old subclass number. Following the principle adopted in 1997, we continue to leave the old subclass blank and insert the note ‘This code is no longer in use.’

The only other significant change is that the Introduction has been brought up to date and the Methodological Guide, previously a separate publication, in now incorporated into this publication.

No further changes or publications are now envisaged until 2007 when a major revision is expected in line with European Community plans for the future development of its classification system NACE Rev 1.1

Operation 2007

NACE and the related family of national and international classification systems, including the UK SIC, will be the subject of a major revision in 2007. The revision provides an opportunity to consider both the structure and the fundamental methodology. There is the option of a major revision, if this meets
the requirements of users of statistics and is practical to implement. Both within and outside government the impact could potentially be major.

The planned revision resulted from a desire to bring the North American economic classification systems and their EU and UN equivalents closer together. It was commonly agreed that there was a requirement for a major revision given that the 2003 update was minor and that NACE has not been significantly modernised since 1990. The 2007 revisions, both of NACE and of our own SIC, have come to be known as Operation 2007.

The first phase of the 2007 revision covers the structure down to and including the 4digit class level. A system of co-ordinators was established covering the whole of the SIC. Each co-ordinator was responsible for obtaining UK proposals for improvements to the structure of their particular part of the SIC. The classifications web page > http://www.statistics.gov.uk/methods_qualit y/sic/operation2007.asp (we are currently in the process of updating the website and a short cut address will be available in the near future.) is one of the many steps taken to complement the work of the co-ordinators by providing a wider UK audience with an opportunity to participate.

After an extensive consultation process, the UK has sent to Eurostat a significant number of detailed and strategic proposals. These proposals, and those made by other Member States, European trade associations and various other sources, will be evaluated during 2003 and 2004 with a view to finalising the new structure by the end of 2004. This fairly early date, around 2 years before the January 2007 implementation date, is necessitated by the time required for the European legislative processes.

The UK will then conduct a second consultation exercise, this time to establish the requirement for national subclasses to be used with the agreed high-level structure. Together, the high-level structure and the new subclasses will become SIC(2007).