Manufactures

P 1-374. General note.

Manufacturing is the mechanical or chemical transformation of inorganic or organic substances into new products. The assembly of component parts of products is also considered to be manufacturing if the resulting product is neither a structure nor other fixed improvement. These activities are usually carried on in plants, factories, or mills, which characteristically use power-driven machines and materialshandling equipment.

Manufacturing production is usually carried on for the wholesale market, for transfer to other plants of the same company, or to the order of industrial users rather than for direct sale to the household consumer. However, some manufacturers (e.g., baking, milk bottling, etc.) sell chiefly at retail to household consurers through the mail, house-to-house routes, or salesmen. Some activities of a service nature (enameling, binding, platemaking, etc.) are included in manufacturing when they are performed primarily for the trade; but they are considered nonmanufacturing when they are performed primarily to the order of the household consumer. On the other hand, some manufacturing industries include business firms which do not undertake physical production but perform only the entrepreneurial functions of buying the materials, designing, and marketing the product, and have the actual production done on contract (e.g., apparel jobbers). In addition to the production of goods and manufacturing services, manufacturing plants engage in related and diverse supporting activities. These activities encompass the acquisition of materials to be processed, their movement into the manufacturing facility, their storage at the manufacturing site, the operation and maintenance of plant and equipment, the design of flow of work through the production process, and necessary arrangements for shipment of output to customers. Also included are a host of subsidiary activities associated with the conduct of the establishment as a manufacturing entity; e.g., management and policy formation, product and market orientation, engineering and quality control, record keeping and accounting, physical security of plant and equipment, and the like. Such subsidiary activities may be performed by personnel located at the manufacturing facility or at an auxiliary unit serving one or more manufacturing locations of the same company. Where these activities are carried on at a different physical location or are performed for more than one plant, they are excluded from the figures for operating manufacturing establishments and are included in the data shown for central administrative offices and auxiliaries in the source reports. The Standard Industrial Classification (SIC) Manual, published by the Office of Management and Budget, is a classification structure for the entire national economy. It was first issued in 1939. For the manufacturing industries, a revised manual was issued in 1945 which, with minor modifications, was used in the 1947 Census of Manufactures. For the 1954 census, the classification structure used in 1947 was again employed, again with minor modifications. In 1957, the SIC system was extensively revised for manufacturing industries and historical comparability of some data was seriously affected. This revision and its effects on census series are described in the introduction and appendixes to the 1958 Census of Manufactures volumes. A minor revision of the SIC occurred between 1958 and 1963.

Another extensive revision of the SIC was issued in 1972.

In the manufacturing sector, the SIC Manual built upon the Bureau of the Census manufacturing industry classifications developed over the years. The SIC system was developed for use in classifying establishments by type of activity in which they are engaged in order to facilitate the collection, tabulation, and publication of data relating

to establishments and to promote uniformity and comparability in the presentation of statistical data by government agencies, trade associations, research organizations, and others. The SIC system divides all activities into broad industrial divisions (manufacturing, mining, retail trade, agriculture, etc.). It further subdivides each division into major industry groups, then into industry groups, and finally into detailed industries.

Except as noted, Alaska and Hawaii are included in census of manufactures data and in annual survey of manufactures data beginning 1958.

P 1-12. Manufactures summary, 1849-1970.

Source: U.S. Bureau of the Census, Annual Survey of Manufactures, 1970-1971, p. 10.

The basic source of comprehensive data on manufactures has been the census of manufactures conducted by the Bureau of the Census. The first census of manufactures covered 1809. A census was taken at 10-year intervals thereafter to 1899 (with the exception of 1829), at 5-year intervals for 1904-1919, and biennially for 1921-1939. The census was suspended during World War II, but was resumed for 1947. Legislation enacted in 1948 provided for a census of manufactures every 5 years, with annual sample surveys authorized for interim years. The 1954 census was the first to be taken as a result of this legislation. Subsequently, the census intervals were revised and censuses were taken in 1958, 1963, and 1967. Annual surveys of manufactures were conducted every year beginning 1949, except during census years. The data from the annual surveys represent estimates derived from a sample of manufacturing establishments canvassed. These estimates may differ from the results that would have been obtained from a complete canvass of all manufacturing establishments. The relative standard errors (measures of the potential differences) associated with these estimates are published in the annual survey volumes. There have been changes in scope from one census of manufactures to another. For "factories and hand and neighborhood industries," data for 1849-1899 are for all establishments with products valued at $500 or more. For "factories, excluding hand and neighborhood industries," data for 1899-1919 are for establishments reporting value of shipments of $500 or more; for 1921-1939, for establishments reporting value of shipments of $5,000 or more, while data beginning 1947 are for establishments employing one or more persons at any time during the census year. These changes in the minimum size limit have not appreciably affected the historical comparability of the census figures except for data on number of establishments.

There have also been a number of changes in the definition of manufacturing industries. Among the more important were changes in the treatment of "railroad repair shops" and "manufactured gas." These industries are included in the figures for 1899-1933, but excluded for 1935-1970. When the change results in the omission of an entire industry for which separate tabulations are available during each census, the adjustments are usually carried back through the previous censuses. Beginning 1954, the figures cover the logging camps and contractors industry, which was not included within the scope of the 1947 census; and establishments engaged in the processing and distribution of fluid milk, which were not included in the figures for earlier census years. Beginning 1958, the figures cover establishments classified in the ready-mixed concrete industry, and establishments classified in the miscellaneous machinery industry that were engaged exclusively or almost exclusively in machine shop repair work. Data for