Annual Survey of Manufactures (ASM)

Definitions

• All Other Employees - The “other employees” covers nonproduction employees of the manufacturing establishment including those engaged in factory supervision above the line-supervisor level. It includes sales (including driver-salespersons), sales delivery (highway truck drivers and their helpers), advertising, credit, collection, installation and servicing of own products, clerical and routine office functions, executive, purchasing, financing, legal, personnel (including cafeteria, medical, etc.), professional, and technical employees. Also included are employees on the payroll of the manufacturing establishment engaged in the construction of major additions or alterations utilized as a separate work force.
• Capital expenditures for new and used plant and equipment - Represents the total new and used capital expenditures reported by establishments in operation and any known plants under construction. These data include expenditures for:
  1. Permanent additions and major alterations to manufacturing and mining establishments.
  2. New and used machinery and equipment used for replacement and additions to plant capacity, if they are of the type for which depreciation, depletion, or (for mining establishments) Office of Minerals Exploration accounts are ordinarily maintained. In addition, for mining establishments, these data include expenditures made during the year for development and exploration of mineral properties. For manufacturing establishments, these data are broken down into three types.
     • Automobiles, trucks, etc. for highway use. These include vehicles acquired under a lease purchase agreement and excludes vehicles leased or normally designed to transport materials, property, or equipment on mining, construction, petroleum development, and similar projects. These vehicles are of such size or weight as to be normally restricted by state laws or regulations from operating on public highways. It also excludes purchases of vehicles that are purchased by a company for highway use.
     • Computers and peripheral data processing equipment. This item includes all purchases of computers and related equipment.
     • All other expenditures for machinery and equipment excluding automobiles and computer equipment. Capital expenditures include work done by contract, as well as by the establishment’s own workforce. These data exclude expenditures for land and mineral rights and cost of maintenance and repairs charged as current operating expenses.
• Company - A company or “enterprise” is comprised of all the establishments that operate under the ownership or control of a single organization. A company may be a business, service, or membership organization; consist of one or several establishments; and operate at one or several locations. It includes all subsidiary organizations, all establishments that are majority-owned by the company or any subsidiary, and all the establishments that can be directed or managed by the company or any subsidiary. A company may have one or many establishments. Examples include product and service sales offices (retail and wholesale), industrial production plants, processing or assembly operations, mines or well sites, and support operations (such as an administrative office, warehouse, customer service center, or regional headquarters). Each establishment should receive, complete, and return a separate census form. If the company operated at different physical locations, even if the individual locations are producing the same line of goods, a separate report is requested for each location. If the company operated in two or more distinct lines of manufacturing at the same location, a separate report is requested for each activity.
• Cost of materials - This term refers to direct charges actually paid or payable for items consumed or put into production during the year, including freight charges and other direct charges incurred by the establishment in acquiring these materials. It includes the cost of materials or fuel consumed, whether purchased by the individual establishment from other companies, transferred to it from other establishments of the same company, or withdrawn from inventory during the year. Included in total cost of materials are:
  1. Cost of parts, components, containers, etc. Includes all raw materials, semifinished goods, parts, containers, scrap, and supplies put into production or used as operating supplies and for repair and maintenance during the year.
  2. Cost of products bought and sold in the same condition.
  3. Cost of fuels consumed for heat and power. Includes the cost of materials or fuel consumed, whether purchased by the individual establishment from other companies, transferred to it from other establishments of the same company, or withdrawn from inventory during the year.
  4. Cost of purchased electricity. The cost of purchased electric energy represents the amount actually used during the year for heat and power. In addition, information was collected on the quantity of electric energy generated by the establishment and the quantity of electric energy sold or transferred to other plants of the same company.
  5. Cost of contract work. This term applies to work done by others on materials furnished by the manufacturing establishment. The actual cost of the material is to be reported on the cost of materials, parts, and containers line of this item. The term “Contract Work” refers to the fee a company pays to another company to perform a service.
• Duplication in cost of materials and value of shipments - The aggregate of the cost of materials and value of shipments figures for industry groups and for all manufacturing industries includes large amounts of duplication, since the products of some industries are used as materials by others. This duplication results, in part, from the addition of related industries representing successive stages in the production of a finished manufactured product. Examples are the addition of flour mills to bakeries in the food group and the addition of pulp mills to the paper manufacturing group of industries. Estimates of the overall extent of this duplication indicate that the value of manufactured products exclusive of such duplication (the value of finished manufactures) tends to approximate twothirds of the total value of products reported in the annual survey. Duplication of products within individual industries is significant within a number of industry groups, e.g., machinery and transportation industries. These industries frequently include complete machinery and their parts. In this case, the parts made for original equipment are materials consumed for assembly plants in the same industry. Even when no significant amount of duplication is involved, value of shipments figures are deficient as measures of the relative economic importance of individual manufacturing industries or geographic areas because of the wide variation in ratio of materials, labor, and other processing costs of value of shipments, both among industries and within the same industry.
• Establishment - An establishment is a single physical location where business is conducted or where services or industrial operations are performed. Data in this sector includes those establishments where manufacturing is performed. A separate report is required for each manufacturing establishment (plant) with one employee or more that is in operation at any time during the year. An establishment not in operation for any portion of the year is requested to return the report form with the proper notation in the “Operational Status” section of the form. In addition, the establishment is requested to report data on any employees, capital expenditures, inventories, or shipments from inventories during the year.
• Interplant transfers - In the case of multiunit companies, the manufacturer was requested to report the value of products transferred to other establishments of the same company at full economic or commercial value, including not only the direct cost of production but also a reasonable proportion of “all other costs” (including company overhead) and profit.
• Number of Employees - This item includes all full-time and part-time employees on the payrolls of operating manufacturing establishments during any part of the pay period that included the 12th of March, June, September, and December. Included are employees on paid sick leave, paid holidays, and paid vacations; not included are proprietors and partners of unincorporated businesses. The ‘‘all employees’’ number is the average number of production workers plus the number of other employees in mid-March.
• Payroll - This item includes the gross earnings of all employees on the payrolls of operating manufacturing establishments paid in the calendar year. Respondents are told they could follow the definition of payrolls used for calculating the federal withholding tax. It includes all forms of compensation, such as salaries, wages, commissions, dismissal pay, bonuses, vacation and sick leave pay, and compensation in kind, prior to such deductions as employees’ social security contributions, withholding taxes, group insurance, union dues, and savings bonds. The total includes salaries of officers of corporations; it excludes payments to proprietors or partners of unincorporated concerns. Also excluded are payments to members of Armed Forces and pensioners carried on the active payrolls of manufacturing establishments. The census definition of payrolls is identical to that recommended to all federal statistical agencies by the Office of Management and Budget. It should be noted that this definition does not include employers’ social security contributions or other nonpayroll labor costs, such as employees’ pension plans, group insurance premiums, and workers’ compensation. The Annual Survey of Manufactures (ASM) provides estimates of employers’ total supplemental labor costs (those required by federal and state laws and those incurred voluntarily or as part of collective bargaining agreements).
• Product codes and classes of products - North American Industry Classification System (NAICS) United States industries are identified by a six-digit code. The longer code accommodates the large number of sectors and allows more flexibility in designing subsectors. In the manufacturing sector for 2002, there are 21 subsectors (three-digit NAICS), 86 industry groups (four-digit NAICS), 184 NAICS industries (five-digit NAICS) that are comparable with Canadian and Mexican classification, and 473 U.S. industries (six-digit NAICS). Product classes of the manufacturing industries have been assigned codes based on the industry from which they originate. There are 1,450 product classes (seven-digit codes). Manufacturing activity involves the mechanical, physical, or chemical transformation of materials, substances, or components into new products. The assembling of component parts of manufactured products is considered manufacturing, except in cases where the activity is appropriately classified in Sector 23, Construction. Manufacturing activities include:
  1. fabricating, processing, and assembling;
  2. maintenance of plant and equipment;
  3. warehousing and storage;
  4. research;
  5. recordkeeping;
  6. health and safety; and
  7. cafeteria and other services if operated as separate establishments.
  Manufacturing activities exclude:
  1. sales branches and sales offices;
  2. research laboratories;
  3. retail stores;
  4. mining activities; and
  5. general administrative offices.
  As in previous censuses, data were collected for most industries on the value of individual products shipped. However, several product classes report value of production rather than value of shipments. The value of production should equal the selling value f.o.b. plant (after discounts and allowances and excluding freight charges) of all products made during the survey year whether sold, transferred, added to inventory, or used in further processing.
• Production Worker Hours - This item covers all hours worked or paid for at the manufacturing plant, including actual overtime hours (not straight-time equivalent hours). It excludes hours paid for vacations, holidays, or sick leave when the employee is not at the establishment.
• Production Workers - The “production workers” number includes workers (up through the line-supervisor level) engaged in fabricating, processing, assembling, inspecting, receiving, storing, handling, packing, warehousing, shipping (but not delivering), maintenance, repair, janitorial and guard services, product development, auxiliary production for plant’s own use (e.g., power plant), recordkeeping, and other services closely associated with these production operations at the establishment covered by the report. Employees above the working-supervisor level are excluded from this item.
• Total beginning and end of year inventories - - These items are comprised of:

  1. Finished goods
  2. Work-in-process
  3. Materials, supplies, fuels, etc.

  Materials inventories refer to goods that are raw inputs to the manufacturing process, and that will be substantially altered to produce an establishment's output. Work-in-process inventories refer to goods that have been substantially transformed in the manufacturing process, but that are not yet the final output of the establishment. Finished goods are goods that represent the final output of the establishment, but that are still within ownership of the establishment.

• Total Fringe Benefits - This item is the employer’s costs for social security tax, unemployment tax, workmen’s compensation insurance, state disability insurance pension plans, stock purchase plans, union-negotiated benefits, life insurance premiums, and insurance premiums on hospital and medical plans for employees. Fringe benefits are divided into legally required expenditures and payments for voluntary programs. The legally required portion consists primarily of federal old age and survivors’ insurance, unemployment compensation, and workers’ compensation. Payments for voluntary programs include all programs not specifically required by legislation, whether they are employer initiated or the result of collective bargaining. They include the employer portion of such plans as insurance premiums, premiums for supplemental accident and sickness insurance, pension plans, supplemental unemployment compensation, welfare plans, stock purchase plans on which the employer payment is not subject to withholding tax, and deferred profit-sharing plans. They exclude such items as company-operated cafeterias, in-plant medical services, free parking lots, discounts on employee purchases, and uniforms and work clothing for employees.
• Total value of shipments - Includes the received or receivable net selling values, “Free on Board” (FOB) plant (exclusive of freight and taxes), of all products shipped, both primary and secondary, as well as all miscellaneous receipts, such as receipts for contract work performed for others, installation and repair, sales of scrap, and sales of products bought and sold without further processing. Included are all items made by or for the establishments from material owned by it, whether sold, transferred to other plants of the same company, or shipped on consignment. The net selling value of products made in one plant on a contract basis from materials owned by another was reported by the plant providing the materials. In the case of multiunit companies, the manufacturer was requested to report the value of products transferred to other establishments of the same company at full economic or commercial value, including not only the direct cost of production but also a reasonable proportion of “all other costs” (including company overhead) and profit (interplant transfers). In addition to the value for the North American Industry Classification System (NAICS) defined products, aggregates of the following categories of miscellaneous receipts are reported as part of a total establishment’s value of product shipments:
  1. value of resales — sales of products bought and sold without further manufacture, processing, or assembly;
  2. contract receipts — receipts for work or services that a plant performed for others on their materials; and
  3. other miscellaneous receipts — includes repair work, installation, sales of scrap, etc.
  Total value of shipments is comprised of three components. These components are:
  1. primary product value of shipments
  2. secondary product value of shipments; and
  3. total miscellaneous receipts.
• Value added - This measure of manufacturing activity is derived by subtracting the cost of materials, supplies, containers, fuel, purchased electricity, and contract work from the value of shipments (products manufactured plus receipts for services rendered). The result of this calculation is adjusted by the addition of value added by merchandising operations (i.e., the difference between the sales value and the cost of merchandise sold without further manufacture, processing, or assembly) plus the net change in finished goods and work-in-process between the beginning- and end-of-year inventories. For those industries where value of production is collected instead of value of shipments, value added is adjusted only for the change in work-in-process inventories between the beginning and end of year. For those industries where value of work done is collected, the value added does not include an adjustment for the change in finished goods or work-in-process inventories. “Value added” avoids the duplication in the figure for value of shipments that results from the use of products of some establishments as materials by others. Value added is considered to be the best value measure available for comparing the relative economic importance of manufacturing among industries and geographic areas.
• Value of product shipments - Includes the total value of all products produced and shipped by all producers, not just those with values of $100,000 or more. However, for selected products, this can represent value of receipts, value of production, or value of work done. Industries that are published on these unique basis are separately.