EC17 Supporting Statement Part A

16

Department of Commerce

United States Census Bureau

OMB Information Collection Request

2017 Economic Census

OMB Control Number 0607-XXXX

Part A. Justification

1. Necessity of Information Collection

The 2017 Economic Census will compile statistics on an estimated 7,489,855 million employer business establishments in industries defined by the 2017 North American Industry Classification System (NAICS).  Data on 4,523,290 of these establishments will be obtained by direct data collection from an estimated 4,345,075 respondents (of which 4,214,680 are covered under this submission).  Data from administrative records or imputation will be used for the remaining 2,966,565 establishments - as well as for any contacted establishments that fail to respond. This request for approval covers the information collection instruments and procedures that will be used in the enumeration of U.S. domestic businesses. The enumeration in the Island Areas (Puerto Rico, Guam, the Commonwealth of the Northern Marianas Islands, the U.S. Virgin Islands, and American Samoa) will be submitted separately to the Office of Management and Budget (OMB) for approval. In addition to the general enumeration of businesses, the 2017 census program also includes surveys of business owners and commodity flows. Those surveys will also be submitted separately.

The public administration sector is out of scope to the economic census. The U.S. Census Bureau conducts, and will submit separately for approval, the quinquennial census of governments and other current programs that measure the activities of government establishments.

The economic census is required by law under Title 13, United States Code (U.S.C.), Section 131, which mandates the taking of a census at 5-year intervals. Section 224 makes reporting mandatory.

The 2017 Economic Census will cover the following NAICS sectors of the U.S. economy:

• Mining, Quarrying, and Oil and Gas Extraction

• Utilities

• Construction

• Manufacturing

• Wholesale Trade

• Retail Trade

• Transportation and Warehousing

• Information

• Finance and Insurance

• Real Estate and Rental and Leasing

• Professional, Scientific and Technical Services

• Management of Companies and Enterprises

• Administrative and Support and Waste Management and Remediation Services

• Educational Services

• Health Care and Social Assistance

• Arts, Entertainment, and Recreation

• Accommodation and Food Services

• Other Services (Except Public Administration)

For more details on the NAICS codes included in the 2017 Economic Census, see Question 19 below.

Table 1 describes economic activities covered by the Economic Census.

The economic census will produce basic statistics by industry for the number of establishments, value of shipments/receipts/revenue/sales, payroll, and employment. It also will yield a variety of industry-specific statistics, including materials consumed, detailed supplies and fuels consumed, electric energy consumed, depreciable assets, selected purchased services, inventories, and capital expenditures, value of shipments/receipts/revenue/sales by product line as defined by the North American Product Classification System (NAPCS), type of operation, size of establishments, and other industry-specific measures.

Attachment D provides drafts of selected examples of standard, consolidated, and classification questionnaires. All 2017 Economic Census draft questionnaire electronic instrument paths can be accessed at: http://www.census.gov/programs-surveys/economic-census/information.html.

2. Needs and Uses

The Economic Census is the primary source of information about the structure and functioning of the nation’s economy and features unique industry, product and geographic detail. Economic census statistics serve as part of the framework for the national accounts and provide essential information for government, business, and the general public. The Federal Government, including agencies such as the Bureau of Economic Analysis (BEA) and the Bureau of Labor Statistics (BLS), use information from the economic census as an important part of the framework for the national income and product accounts, input-output tables, economic indices, and other composite measures that serve as the factual basis for economic policy-making, planning, and program administration. Further, the census provides sampling frames and benchmarks for current business surveys which track short-term economic trends, serve as economic indicators, and contribute critical source data for current estimates of gross domestic product. State and local governments rely on the economic census as a unique source of comprehensive economic statistics for small geographic areas for use in policy-making, planning, and program administration. Finally, industry, business, academia, and the general public use information from the economic census for evaluating markets, preparing business plans, making business decisions, developing economic models and forecasts, conducting economic research, and establishing benchmarks for their own sample surveys.

Information quality is an integral part of the pre-dissemination review of the information disseminated by the Census Bureau (fully described in the Census Bureau’s Information Quality Guidelines). Information quality is also integral to the information collections conducted by the Census Bureau and is incorporated into the clearance process required by

the Paperwork Reduction Act.

3. Use of Information Technology

Companies will satisfy their reporting requirement for this information collection by accessing the new Respondent Portal and reporting data electronically, using a web-based electronic reporting tool. Companies with more than one location no longer need to download software with a spreadsheet interface or provide data on CDs. Part B, Question 3 of this supporting statement describes the benefits of the portal and web-based reporting. For the 2012 Economic Census, approximately 53% of responses were provided electronically. In 2017, with the elimination of paper questionnaires, all respondents are expected to report electronically. See Part B, Question 3 of this supporting statement, for descriptions of the research projects conducted to ensure the electronic instrument minimizes response burden to the extent possible.

4. Efforts to Identify Duplication

The Census Bureau found no information collections by Federal agencies, trade groups, or businesses that duplicate the content, comprehensive coverage, industry detail, product detail, geographic detail, and statistical reliability provided by the economic census. These features are distinguishing characteristics of economic census data; they meet requirements of principal data users and make the census uniquely suited to the purposes it serves.

5. Minimizing Burden

This information collection minimizes the burden on small businesses by excluding most of them from the Census data collection operations. Only establishments with paid employees will be included in the Census data collection operations. The census will use data from Federal administrative records in lieu of census reports for most small establishments with paid employees. Small establishments are defined as those whose annual payroll is below an industry specific payroll cutoff. A probability sample of these establishments will be asked to report data to permit development of reliable estimates for data items that are not available from Federal administrative records (e.g., value of shipments/receipts/revenue/sales by product line and other special inquiries). Part B of this supporting statement gives a more complete description of this data collection methodology.

6. Consequences of Less Frequent Collection

The economic census is conducted at 5-year intervals, as required by Title 13 USC, Section 131. If this information collection were conducted less frequently, it would diminish the timelines and usefulness of the statistics produced. This would cause a corresponding deterioration in the national accounts, input-output tables, economic indices, business surveys, and other measures that rely on source data and benchmarks from the economic census. Similarly, less frequent collection would diminish the usefulness of the economic census as a source of comprehensive information for economic policy-making, planning, and program administration.

7. Special Circumstances

This information collection will be conducted in a manner consistent with Office of Management and Budget (OMB) guidelines and there are no special circumstances.

8. Consultations Outside the Agency

Consultations with principal data users occurred in 2015. To initiate this process, on August 20, 2015 we mailed letters to 1,539 organizations, including Federal agencies, trade groups, and trade publications and referred them to the Business Help Site (https://bhs.econ.census.gov/ec12/pages/formarchive_default.html), which houses copies of questionnaires for the 2012 Economic Census. We asked these groups to review the questionnaire(s) relevant to their data needs and interests and to provide recommendations on content, terms and definitions, instructions, and other aspects of questionnaire design for the 2017 Economic Census. A follow-up mailing occurred on September 25, 2015. These consultations were provided individually and were not for the purpose of providing a group consensus opinion. We received responses by e-mail from 35 groups.

Attachment G identifies the organizations that we contacted in this effort. Attachment H gives a representative selection of the correspondence we received from participants in these consultations.

On August 4, 2015 we published a general notice in the Federal Register (Vol. 80, No. 149, page 46238-46239) soliciting public comment on the 2017 Economic Census. Attachment I contains the two comments we received.

We were unable to incorporate several recommendations in the 2017 Economic Census because they were out of scope to the Economic Census, required additional research, consulting, or testing that did not meet our schedule, or entailed excessive cost or response burden, firms we consulted said they could not report requested information, or there were conflicts with other requirements.

On July 5, 2016, we published a presubmission notice in the Federal Register (Vol. 81, No. 128, page 43571-43573) inviting public comment on our plans to submit this request. We received no comments.

9. Paying Respondents

The Census Bureau does not pay respondents and does not provide them with gifts in any form to report requested information in the economic census.

10. Assurance of Confidentiality

The online reporting system for this information collection will give respondents the following assurance of confidentiality:

YOUR RESPONSE IS REQUIRED BY LAW. Title 13 United States Code, Sections 131 and 191 authorizes this collection. Section 224 requires your response. The U.S. Census Bureau is required by Section 9 of the same law to keep your information CONFIDENTIAL and can use your responses only to produce statistics. The Census Bureau is not permitted to publicly release your responses in a way that could identify your business, organization, or institution. Per the Federal Cybersecurity Enhancement Act of 2015, your data are protected from cybersecurity risks through screening of the systems that transmit your data.

Similar assurances will be included in the initial contact letter that directs respondents to report online.

11. Justification for Sensitive Questions

This information collection asks no questions of a sensitive nature.

12. Estimate of Respondent Burden

Attachment A provides an estimate of respondent burden hours for each of the electronic questionnaire instrument paths covered by this request. The number of respondents for each electronic questionnaire instrument path is an estimate derived from the number of establishments currently active on the Census Bureau’s Business Register and the number likely to be selected into the 2017 Economic Census samples. Burden estimates assume a 100 percent response rate.

Estimates for number of hours per response are based on our experience with conducting past economic censuses and our reasonable estimates of the time needed to preview the questions being asked, the accompanying instruction sheets, and other data collection materials; to gather, organize, and summarize information; and to record answers using the online reporting system. Overall respondent burden for the 2017 Economic Census is estimated at 5,691,972 hours. Overall, respondent cost, is estimated at $198,140,443. This cost estimate was calculated by using mean annual wage data from the BLS Occupational Employment Statistics (OES). Table 2 summarizes the estimated respondent burden and cost by sector and type of questionnaire.

13. Estimate of Cost Burden

We do not expect respondents to incur any costs other than that of their time to respond. The information requested is of the type and scope normally contained in company records and no special hardware or accounting software or system is necessary to provide answers to this information collection. Therefore, respondents are not expected to incur any capital and start-up costs or system maintenance costs in responding. Further, purchasing of outside accounting or information collection services, if performed by the respondent, is part of usual and customary business practice and not specifically required for this information collection.

14. Cost to the Federal Government

The cost to the government for this work is included in the total cost of the 2017 Economic Census, estimated to be $657,927,000. This includes all direct and indirect costs associated with the collection, processing, analyses, preparation and publication of statistics from the 2017 Economic Census and Related Programs.

15. Reason for Change in Burden

This collection is being submitted as new. This burden estimate differs from that published in the 60-day Federal Register Notice due to updated and more detailed estimates of the likely number of respondents for each electronic questionnaire path as well as better estimates of the time required to complete the new electronic questionnaires.  In addition, the original estimate included burden, which is now covered under a separate OMB clearance (0607-0991).

16. Project Schedule

The U.S. Census Bureau will mail initial contact letters for this information collection in January 2018, with a due date of March 15, 2018. Mail follow-ups to nonrespondents will begin in April 2018. These efforts, supplemented by telephone follow-ups to selected nonrespondents, will continue through September 2018. Receipt of administrative records, automated edits, and initial efforts to resolve reporting problems will continue through September 2018. We will then prepare tabulations and related analytical summaries, perform analyses, and submit the data to further review and correction. The first release of data is scheduled to occur in December 2018, and all data dissemination should be complete by December 2020.

Timetable for the 2017 Economic Census

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Activity Start¹ End¹

Receive, process administrative records 05/17 09/18

Identify establishments to be included in the Census 08/17 03/18²

Prepare mailing pieces 12/17 01/18

Mail initial contact letters 01/18 01/18²

Receive and check in responses 01/18 10/18

Edit data, resolve problems 02/18 09/18

Response due date 03/18 03/18²

Follow-up for nonresponse 04/18 09/18

Close out data collection 10/18 10/18

Prepare and analyze tabulations 10/18 11/20

Data release 12/18 12/20

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¹ All dates are approximate.

² New establishments selected in March 2018, will be mailed an initial contact letter in April 2018, with a May 21, 2018 deadline.

Our data dissemination plans summarizing the results of this information collection provide for data to be released earlier than those from the 2012 Economic Census. To improve the timeliness, relevance, and usefulness of all data products, the Census Bureau will continue to release economic census data electronically and on the Internet. Products from this data collection include the following:

• Economy-Wide Business Statistics--This series will include preliminary data for all 18 NAICS sectors covered by the Economic Census for establishments with payroll.  It will provide detailed statistics for the United States (2 through 6 digit NAICS) and states (2 through 3 or 2 through 4 digit NAICS) on: the number of establishments, value of shipments/receipts/revenue/sales, annual payroll, first quarter payroll, employment for the pay period including March 12, 2017; United States level statistics on: product lines; statistics on manufacturing materials consumed; statistics on value of construction work by type and location, specialization in type of construction, value of business done, specialization in kind of business activity; and statistics on selected mining supplies, minerals received for preparations, purchased machinery, and fuels consumed.

• Geographic Area Series--This series will have releases for the United States, each state, and in some cases the District of Columbia, and offshore areas. These releases will summarize data by kind of business for the United States and states; most sectors also include metropolitan areas, counties and places. Tabulations will present basic statistics for establishments with payroll, including number of establishments, revenue, annual payroll, first quarter payroll, and employment for the pay period including March 12, 2017.

• Subject Series--This series will present final tabulations for the United States and, in some cases, for states. All summaries will present data only for establishments with payroll. Included will be an Establishment and Firm Size (Including Legal Form of Organization) release that will summarize basic information by value of shipments/receipts/revenue/sales size category and by employment size category for both establishments and firms, value of shipments/receipts/revenue/sales concentration for the largest firms in each industry, and industry composition by legal form of organization; a Product Lines release that will give detailed industry statistics on value of shipments/receipts/revenue/sales by product line and product line value of shipments/receipts/revenue/sales totals by detailed industry; and a Miscellaneous Subjects release that will present a variety of tabulations for industry-specific special inquiries.

17. Request to Not Display Expiration Date

The assigned expiration date will be displayed on all electronic questionnaire instrument paths in the data collection instrument.

18. Exceptions to the Certification

There are no exceptions to the certification.

19. NAICS Codes Affected

For the 2017 Economic Census, the following NAICS subsectors will be covered:

Mining, Quarrying, and Oil and Gas Extraction

211. Oil and Gas Extraction

212. Mining (except Oil and Gas)

213. Support Activities for Mining

Utilities

221 Utilities

Construction

236 Construction of Buildings

237 Heavy and Civil Engineering Construction

238 Specialty Trade Contractors

Manufacturing

311 Food Manufacturing

312 Beverage and Tobacco Product Manufacturing

313 Textile Mills

314 Textile Product Mills

315 Apparel Manufacturing

316 Leather and Allied Product Manufacturing

321 Wood Product Manufacturing, Except Furniture

322 Paper Manufacturing

323 Printing and Related Support Activities

324 Petroleum and Coal Product Manufacturing

325 Chemical Manufacturing

326 Plastics and Rubber Product Manufacturing

327 Nonmetallic Mineral Product Manufacturing

331 Primary Metal Manufacturing

332 Fabricated Metal Product Manufacturing

333 Machinery Manufacturing

334 Computer and Electronic Product Manufacturing

335 Electrical Equipment, Appliance and Component Manufacturing

336 Transportation Equipment Manufacturing

337 Furniture Manufacturing

339 Miscellaneous Manufacturing

Wholesale Trade

423 Durable Goods Merchant Wholesalers

424 Nondurable Goods Merchant Wholesalers

425 Wholesale Electronic Markets and Agents and Brokers

Retail Trade

441 Motor Vehicle and Parts Dealers

442 Furniture and Home Furnishings Stores

443 Electronics and Appliance Stores

444 Building Material and Garden Equipment and Supplies Dealers

445 Food and Beverage Stores

446 Health and Personal Care Stores

447 Gasoline Stations

448 Clothing and Clothing Accessories Stores

451 Sporting goods, Hobby, Musical Instrument, and Book Stores

452 General Merchandise Stores

453 Miscellaneous Store Retailers

454 Nonstore Retailers

Transportation and Warehousing

481 Air Transportation

483 Water Transportation

484 Truck Transportation

485 Transit and Ground Passenger Transportation

486 Pipeline Transportation

487 Scenic and Sightseeing Transportation

488 Support Activities for Transportation

492 Couriers and Messengers

493 Warehousing and Storage

Information

511 Publishing Industries (except Internet)

512 Motion Picture and Sound Recording Industries

515 Broadcasting (except Internet)

516 Internet Publishing and Broadcasting

517 Telecommunications

518 Internet Service Providers, Web Search Portals, and Data Processing Services

519 Other Information Services

Finance and Insurance

521 Monetary Authorities-Central Bank

522 Credit Intermediation and Related Activities

523 Securities, Commodity Contracts, and Other Financial Investments and Related Activities

524 Insurance Carriers and Related Activities

Real Estate and Rental and Leasing

531 Real Estate

532 Rental and Leasing Services

533 Lessors of Nonfinancial Intangible Assets (except Copyrighted Works)

Professional, Scientific, and Technical Services

541 Professional, Scientific, and Technical Services

Management of Companies and Enterprises

551 Management of Companies and Enterprises

Administrative and Support and Waste Management and Remediation Services

561 Administrative and Support Services

562 Waste Management and Remediation Services

Educational Services

611 Educational Services (6111, 6112, and 6113 are out of scope)

Health Care and Social Assistance

621 Ambulatory Health Care Services

622 Hospitals

623 Nursing and Residential Care Facilities

624 Social Assistance

Arts, Entertainment, and Recreation

711 Performing Arts, Spectator Sports, and Related Industries

712 Museums, Historical Sites, and Similar Institutions

713 Amusement, Gambling, and Recreation Industries

Accommodation and Food Services

721 Accommodation

722 Food Services and Drinking Places

Other Services (Except Public Administration)

811 Repair and Maintenance

812 Personal and Laundry Services

813 Religious, Grantmaking, Civic, and Professional and Similar Organizations (8131, 81393, and 81394 are out of scope)