This section relates to the place and behavior of the business firm and to business initiative in the American economy. It includes data on the number, type, and size of businesses; financial data of domestic and multinational U.S. corporations; business investments, expenditures, and profits; and sales and inventories.
The principal sources of these data are the Survey of Current Business, published by the Bureau of Economic Analysis (BEA), the Federal Reserve Bulletin, issued by the Board of Governors of the Federal Reserve System, the annual Statistics of Income (SOI) reports of the Internal Revenue Service (IRS), and the Census Bureau’s Economic Census, County Business Patterns, Quarterly Financial Report for Manufacturing, Mining, and Trade Corporations (QFR), Surveys of Minority- and Women- Owned Business Enterprises, and AnnualCapital Expenditures Survey.
Business firms-A firm is generally defined as a business organization under a single management and may include one or more establishments. The terms firm, business, company, and enterprise are used interchangeably throughout this section. A firm doing business in more than one industry is classified by industry according to the major activity of the firm as a whole.
The IRS concept of a business firm relates primarily to the legal entity used for tax reporting purposes. A sole proprietorship is an unincorporated business owned by one person and may include large enterprises with many employees and hired managers and part-time operators. A partnership is an unincorporated business owned by two or more persons, each of whom has a financial interest in the business. A corporation is a business that is legally incorporated under state laws. While many corporations file consolidated tax returns, most corporate tax returns represent individual corporations, some of which are affiliated through common ownership or control with other corporations filing separate returns.
Economic census-The economic census is the major source of facts about the structure and functioning of the nation’s economy. It provides essential information for government, business, industry, and the general public. It furnishes an important part of the framework for such composite measures as the gross domestic product estimates, input/output measures, production and price indexes, and other statistical series that measure shortterm changes in economic conditions. The Census Bureau takes the economic census every 5 years, covering years ending in ‘‘2’’ and ‘‘7.’’ The economic census forms an integrated program at 5-year intervals since 1967, and before that for 1963, 1958, and 1954. Prior to that time, the individual censuses were taken separately at varying intervals.
The economic census is collected on an establishment basis. A company operating at more than one location is required to file a separate report for each store, factory, shop, or other location. Each establishment is assigned a separate industry classification based on its primary activity and not that of its parent company. Establishments responding to the establishment survey are classified into industries on the basis of their principal product or activity (determined by annual sales volume) in accordance with the North American Industry Classification System-United States, 1997 manual (see below).
More detailed information about the scope, coverage, classification system, data items, and publications for each of the economic censuses and related surveys is published in the Guide to the Economic Censuses and Related Statistics. More information on the methodology, procedures, and history of the censuses is available in the History of the 1997 Economic Census found on the Census Bureau Web site at <http://www.census.gov/prod/ec97/pol00-hec.pdf>.
Data from the 1997 Economic Census were released through the Census Bureau’s American FactFinder service, on CD-ROM, and in Adobe Acrobat PDF reports available on the Census Bureau Web site. For more information on these various media of release, see the following page on the Census Bureau Web site <http://www.census.gov/epcd/www/econ97.html>.
North American Industry Classification System (NAICS)-The 1997Economic Census is the first census to present data based on the new NAICS.Previous census data were based on the Standard Industrial Classification (SIC) system. This new system of industrial classification was developed by experts on classification in government and private industry under the guidance of the Office of Information and Regulatory Affairs, Office of Management and Budget.
There are 20 NAICS sectors, which are subdivided into 96 subsectors (three-digit codes), 313 industry groups (four-digit codes), and, as implemented in the United States, 1,170 industries (five- and sixdigit codes). While many of the individual NAICS industries correspond directly to industries as defined under the SIC system, most of the higher level groupings do not.
Most of the 1997 Economic Census data are issued on a NAICS basis as seen in the industry and geographic series from the census. Other related census reports remain on an SIC basis due to use of administrative records and other methodological and data processing issues. Current survey data from the Census Bureau as well as other statistical agencies are converting over time to NAICS after benchmarking to the 1997 Economic Census where appropriate or implementation of data collection on a NAICS basis.
Quarterly Financial Report-The Quarterly Financial Report (QFR) program publishes quarterly aggregate statistics on the financial conditions of U.S. corporations. The QFR requests companies to report estimates from their statements of income and retained earnings, balance sheets, and related financial and operating ratios for domestic operations. The statistical data are classified and aggregated by type of industry and asset size. The QFR sample includes large manufacturing companies, mostly with $250 million or more in assets. It also includes a small sample of manufacturing companies, mostly with assets between $250 thousand and $250 million, and a sample of mining, wholesale, and retail companies, mostly with assets of $50 million or more. The data are published quarterly in the Quarterly Financial Report for Manufacturing, Mining, and Trade Corporations and on the Internet at <http://www.census.gov/csd/qfr>.