Implementation of NACE Rev. 2 ECONOMIC AND ACTIVITY CLASSIFICATIONS Title of course Implementation of NACE Rev. 2 Marie-Madeleine Fuger (INSEE -France-) marie-madeleine.fuger@insee.fr Gheorghe Constantinescu (INSSE -Romania-) constantinescugh@yahoo.com

Implementation of NACE Rev. 2 European context ♦ According to European legislation the use of NACE Rev. 2 is mandatory within the European Statistical System - Regulation (EC) No 1893/2006 of the European Parliament and of the Council of 20 December 2006. NACE Rev. 2 came into force on January 1st, 2008. ♦ In September 2004, EUROSTAT decided to set up a Task Force whose mandate was to identify all domains and coordinate all actions related to the implementation of the revised classifications; ♦ In order to help the NSI`s a dedicated web page containing all available information on NACE Rev.2 (the structure of NACE Rev. 2; the explanatory notes; the introductory guidelines; correspondence tables between the NACE versions; Regulation draft) has been created; ♦ The Implementation plan of NACE Rev. 2, in various statistical domains, was elaborated.

Implementation of NACE Rev. 2 Implementation plan of NACE Rev.2 European context Implementation plan of NACE Rev.2 Domain Ref. Year Delivery first data according to NACE Rev.2 Back-cast time series length Delivery of back cast time series Energy 2008 November 2009 ▬ Labor Force Survey June 2008 Voluntary basis Structural Buisiness Surveys – SBS October 2009 EU- Survey on Income and Living Conditions December 2009 Science&Technology 2003 – 2007 Labor Cost Survey June 2010 Short Term Statistics – STS 2009 March 2009 2000 – 2008 Labor Cost Index June 2009 Job Vacancy Survey Inform. Soc. 2003 – 2008 (under discussion) National Accounts 2010 September 2011 1990 – 2010 – for specific variables; 1995 – 2010 – for the new MS Under discussion: - Sept. 2011 and/or Sept. 2012

Implementation of NACE Rev. 2 European context ♦ Implementation of NACE Rev. 2 was a complex process, requiring both methodological assistance and a good coordination of NSI’s actions. To support the NSI’s, a set of handbooks has been elaborated. - Setting up an implementation plan for NACE Rev. 2; - Implementation of NACE Rev.2 in Business Registers; - Handbook on methodological aspects related to sampling designs and weights estimations; - Handbook on back-casting; - Rules for classification of units outsourcing their production.

Implementation of NACE Rev. 2 European context ♦ Implementation of NACE Rev. 2 is a long process, implying the completion of some certain stages: ▪ The setting up of the implementation plan; ▪ The elaboration of the national version of NACE Rev. 2 and the adaptation of national legislations according to stipulations from NACE Rev. 2 Regulation; ▪ The recoding of the Business Registers according to NACE Rev. 2 (or its national version); ▪ The adaptation of the statistical surveys (samples and estimation techniques); ▪ The reconstruction of time series (double reporting, back-casting); ▪ The changes of the reference database and dissemination formats.

Implementation of NACE Rev. 2 NSI Romania The setting up of the national implementation plan Types of changes between NACE Rev. 1.1 and NACE Rev. 2 BR updating – Implementation of NACE Rev. 2/CANE Rev. 2 in the Romanian Business Registers - REGIS Implementation plan of CANE Rev. 2/ NACE Rev. 2 Actions ► Since 2004, NSI Romania organized meetings with the representatives of the local and central public administration in order to prepare the switch to the new activities classification. ► In the year 2004 a first draft of the general implementation plan was elaborated. During May – December 2005, the general plan for implementation of CANE Rev. 2 was reconsidered and finalized. (ANNEX 1) ► In NSI Romania a Committee for implementation of CANE Rev. 2 was created.

Implementation of NACE Rev. 2 NSI Romania Types of changes NACE Rev. 1.1 – NACE Rev. 2 A - 1 : 1 (to one NACE Rev.1.1 class corresponds one NACE Rev. 2 class); B - n : 1 (to two or more NACE Rev. 1.1 classes corresponds one NACE Rev. 2 class); C - 1 : n (to one NACE Rev. 1.1 class corresponds two or more NACE Rev. 2 classes); D - n : m (at two or more NACE Rev. 1.1 classes corresponds two or more NACE Rev. 2 classes).

Implementation of NACE Rev. 2 NACE Rev. 2 classes by types of changes NSI Romania NACE Rev. 2 classes by types of changes - Tip A (1:1) : 251 classes (41%) – automatic recoding - Tip B (n:1) : 9 classes (1%) – automatic recoding - Tip C (1:n) : 55 classes (9%) – requests specific BR improvement survey - Tip D (n:m) : 300 classes (49%) – requests specific BR improvement survey

Implementation of NACE Rev. 2 NSI Romania BR updating Objective • The units from Romanian BR will be recoded according to CANE Rev.2; The national activities classification CANE Rev.2 finalized before June, 2007 (including the correspondence table CANE Rev.1 - CANE Rev.2); • The BR updating process will be completed before the end of 2007; A specific statistical survey (AM_REGIS 2007), for BR updating, has been organized; The survey took place in September, 2007. • The double-code status, for the units in BR, will be kept until 2011;

Implementation of NACE Rev. 2 NSI Romania BR updating BR status at 31 December 2006 Type Total Inactive units Active INFORMATION SOURCES Public institutions 12 876 ---- No special problems. For ~ 65% of units the recoding process was done automatically. The rest of the units (~ 35%) were exhaustively included in the AM_REGIS 2007 Survey. NGO`s 120 213 100 784 19 429 About 85% units were automatically recoded. For the rest (15%) the recoding process was based on information coming from the administrative sources. Enterprises 929 407 518 912 410 495 0 - 4 employees 314 757 AM_ REGIS 2007 Survey + administrative sources (MPF – Tax/VAT Register and MJ – Trade Register ) 5 - 19 69 805 AM REGIS 2007 Survey + PRODROM Survey + administrative sources (MPF – Tax/VAT Register and MJ – Trade Register) 20 and more 25 933 AM_REGIS 2007 Survey

Implementation of NACE Rev. 2 NSI Romania BR updating AM_REGIS 2007 Survey Survey characteristics units which can not be recoded automatically; units covering around 80% of the turnover for each activity class from CANE Rev.1; organized separately from other statistical surveys; the questionnaires were tailored (personalized) – including correspondence tables; about 45 000 units were surveyed: - 25 933 units with over 20 employees; - 14 628 units that represent a sample from 0-19 employees stratum; - 4 385 public institutions.

Implementation of NACE Rev. 2 NSI Romania BR updating Methods applied for the BR updating First method applied by NSI Romania for the BR updating Example1 CANE Rev.1 / NACE Rev.1.1 CANE Rev.2 / NACE Rev. 2 32.10 “Manufacture of electronic valves and tubes and other electronic components” 26.11 “Manufacture of electronic components” 26.12 “Manufacture of loaded electronic boards” 27.90 “Manufacture of other electrical equipment” 33.13 “Repair of electronic and optical equipment” Step 1 – BR analyze The analysis of BR shows that: - 66 units - with main activity 32.10; - 40 units - covering more than 80% from the total turnover of activity class 32.10 - units to be surveyed.

Implementation of NACE Rev. 2 NSI Romania BR updating Step 2 – AM_REGIS 2007 Survey After the survey, the distribution according to CANE Rev.2/NACE Rev.2 structure indicate that: class 26.11 – 25 units class 26.12 – 13 units class 27.90 – 1 unit class 33.13 – 1 unit – 63% (40 units means 100%) – 33% (40 units means 100%) – 2% (40 units means 100%) Step 3 – Decision The units not included in AM_REGIS 2007 were re-codified with 26.11, because this activity class has the height majority, 63 %, according to the distribution of surveyed units .

Implementation of NACE Rev. 2 NSI Romania BR updating Step 4 – BR update The units belonging to the CANE Rev.1/NACE Rev.1.1 class 32.10 were re-coded (double coded) as follows: class 26.11 – 51 units = 25 (AM_REGIS 2007) + 26 (un-surveyed units) class 26.12 – 13 units (AM_REGIS 2007) class 27.90 – 1 unit (AM_REGIS 2007) class 33.13 – 1 unit (AM_REGIS 2007) Conclusions ▪ This method has been applied when a new activity class contained more than 60% of the units surveyed. ▪ The 60% limit was decided, at national level, by the Committee for implementation of CANE Rev.2 ;

Implementation of NACE Rev. 2 NSI Romania BR updating Second method applied by NSI Romania for the BR updating Example2 CANE Rev.1 / NACE Rev.1.1 CANE Rev.2 / NACE Rev.2 17.54 “Manufacture of other textiles n.e.c.” 13.96 “Manufacture of other technical and industrial textiles” 13.99 “Manufacture of other textiles n.e.c.” 17.22 “Manufacture of households and sanitary goods and of toilet requisites” Step 1 – BR analyze The analysis of BR shows that: - 263 units - with main activity 17.54; - 58 units - covering more than 80% from the total turnover of activity class 17.54 - units to be surveyed.

Implementation of NACE Rev. 2 NSI Romania BR updating Step 2 – AM_REGIS 2007 Survey After the survey, the distribution according to CANE Rev.2/NACE Rev.2 structure indicate that: class 13.96 – 30 units class 13.99 – 26 units class 17.22 – 2 units – 52% (58 units means 100%) – 44% (58 units means 100%) – 4% (58 units means 100%) Step 3 – Decision For the rest of the units, not included in AM_REGIS 2007, were applied the calculated percents. { 52% => class 13.93 - 107 units 44% => class 13.99 - 90 units 4% => class 17.22 - 8 units 263 – 68 = 205

Implementation of NACE Rev. 2 NSI Romania BR updating Step 4 – BR update The units belonging to the CANE Rev.1/NACE Rev.1.1 class 17.54 were re-coded (double coded) as follows: class 13.93 – 137 units = 30 (AM_REGIS 2007) + 107 (52% of un-surveyed units) class 13.99 – 116 units = 26 (AM_REGIS 2007) + 90 (44% of un-surveyed units) class 17.22 – 10 units = 2 (AM_REGIS 2007) + 8 (4% of un-surveyed units) Conclusions ▪ This method has been applied when the content of each new activity classes was under 60% of the units surveyed. ▪ The 60% limit was decided, at national level, by the Committee for implementation of CANE Rev.2 ;

Implementation of NACE Rev. 2 NSI Romania BR updating Conversion matrix CANE Rev.1/NACE Rev.1.1 - CANE Rev.2/NACE Rev.2 ► The conversion matrix was built using the repartitions of units from the grossing up of the results obtained in the AM_REGIS 2007 survey. (ANNEX 2) ► The conversion coefficients were calculated using: ● The turnover of the units belonging to each pair of activity classes; ● The number of employees of the units belonging to the same pairs. ► The coefficients from conversion matrix were used for the first time in the STS data back-casting.

Implementation of NACE Rev. 2 NSI Romania BR updating Conversion matrix for Example No. 1 CAEN Rev.1 Rev.2 Turnover CAEN Rev.1 Employees CAEN Rev.2 Conversion coefficients (based on turnover) (based on the number of employees) 32.10 26.11 687724324 7507 435649953 5295 63,35 70,53 26.12 250446593 2137 36,42 28,47 27.90 1356331 70 0,2 0,93 33.13 271447 5 0,04 0,07

Implementation of NACE Rev. 2 NSI Romania BR updating Conversion matrix for Example No. 2 CAEN Rev.1 Rev.2 Turnover CAEN Rev.1 Employees CAEN Rev.2 Conversion coefficients (based on turnover) (based on the number of employees) 17.54 13.96 308860492 3970 167153737 1350 54,12 34,01 13.99 135868187 2562 43,99 64,53 17.22 5838568 58 1,89 1,46

Implementation of NACE Rev. 2 NSI Romania Results ► Classification of Activities from National Economy - CANE Rev.2 was approved by Order of the NSI President No 337/April 2007 and published in the Official Journal of Romania No. 293/3.05.2007. CANE Rev.2 came into force on January 1st, 2008. ► The Romanian Business Register – REGIS was updated before the end of year 2007. The new version of Business Register -REGIS 2- is in use since January 1st, 2008. All units in REGIS 2 are double coded according to CANE Rev.1 and CANE rev.2. ► Implementation of CANE Rev.2/ NACE Rev. 2 in various statistical domains was done without delays, according to the national implementation plan.

Implementation of NACE Rev. 2 Thank you!