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8. Employment, Man-Hours, and Payroll Data Collected in the Annual Survey
Employment figures for operating establishments that are covered in the Annual Survey of Manufactures have been coordinated with the BOASI program records for consistency in classification, coverage, and statistical accuracy, as described in the preceding section. It is possible, therefore, to relate the Annual Survey data to total manufacturing employment figures and taxable payroll data of BOASI (within the limits described in the section above). Although Annual Survey reports are collected only from operating manufacturing establishments (i.e., factories, plants, and mills), and not from separate administrative offices and units auxiliary to manufacturing, the employment and payroll data for these latter activities (which account for approximately 2 percent of total manufacturing employment), are obtained from Bureau of Old-Age and Survivors Insurance records.
segments: (1) Activities auxiliary to manufacturing including employment in such activities as houses, research laboratories, and maintenance activities which are not included in the Annual Survey of Manufactures returns; (2) central administrative office employment not included in Annual Survey reports for operating manufacturing establishments; and (3) a miscellaneous segment of employment classified by BOASI as manufacturing but included in Census reports of operating manufacturing establishments of the same company.
Of the 400, 000 employees tabulated as "administrative and auxiliary" in 1953, about 333,000 have been specifically identified as performing activities described in (1) and (2) above. It is likely that a substantial part of the remaining 67,000 employees are in units which can be appropriately classified as administrative and auxiliary.
b. Definition of "All Employees":
The "all employees' category comprises all full-time and part-time persons on payrolls who worked or received compensation for any part of each of the four selected pay periods covered by the report. It includes persons on paid sick leave, paid holidays and paid vacations. This category is equivalent to the sum of the three employee classes for which statistics were collected in the 1947 Census, namely "production and related workers," 'force-account construction workers," and "administrative, sales, supervisory, technical, office and all other personnel."'
d. Definition of "All Other Employees":
The all other employees" category comprises nonproduction personnel of operating manufacturing establishments, including those that are executive, engaged in the following activities: purchasing, finance, accounting, legal, personnel, cafeteria, medical, professional, and technical activities, sales, sales delivery (e. g., routemen), advertising, credit, collection, and installation and servicing of own products, routine office functions, and factory supervision (above the working foreman level). Also included in this category in the 1953 Annual Survey are "forceaccount construction employees' engaged in the construction of major additions or alterations to the plant, and who are utilized as a separate work force.
e. Monthly vs. "Average" Employment Totals:
The annual survey report form requested employment figures from each manufacturing establishment in the sample for the payroll period ended nearest the middle of each quarter of the report year. The middle of March was selected for the first quarter, however, to facilitate the comparison of Census and Bureau of Old-Age and Survivors Insurance employment statistics (as described in Section 7 above). An average employment figure was calculated for both the "all employees" and "production workers" categories from the four reported monthly figures. The 1947 Census averages, on the other hand, were based on 12 monthly figures.
f. Definition of "Wages and Salaries":
"Total wages and salaries for the year" reported for all employees in operating manufacturing establishments are defined as their gross earnings, including commissions, dismissal pay, nonproduction bonuses, vacation and sick leave pay, and compensation in kind, and prior to such deductions as employees' Social Security contributions, withholding taxes, group insurance, union dues, and saving bonds. This definition of wages and salaries, recommended to all Federal statistical agencies by the Bureau of the Budget, is exactly the same as that used in the 1947 Census. It does not include employers' Social Security contributions, nor other non-payroll labor costs such as employees' pension plans, group insurance, and workmen's compensation.
g. Definition of 'Production and Related Workers Man-Hours":
"Man-hours" is a comprehensive measure of activity at the plant that includes all production and related worker" plant hours worked or paid for. It excludes hours paid for vacations, holidays, or sick leave when the employee was not at the plant. Actual overtime hours are included rather than straight-time equivalent hours. As in the 1947 Census, man-hours were requested by quarter (either 13 weeks or 3 calendar months), because the majority of manufacturers can readily report such information on this basis.
a. Definition of "Total Cost of Materials, etc.'
The term "cost" refers to direct charges actually paid or payable, after discounts and including freight, for (1) materials, parts, containers, and supplies; (2) fuel; and (3) purchased electric energy actually consumed during the entire year. Manufacturers were asked to include the cost of materials or fuels consumed regardless of whether these items were purchased by the individual establishment from other concerns, transferred to it from other establishments of the same
company, or withdrawn from inventory during the year. Such cost items were to be included, regardless of whether the materials were processed by the reporting establishment or by others for its account (contract work). For 1953, 1952, and 1951 manufacturers were instructed to include a separate figure in this item on the cost of all the materials that were resold in the same form as purchased, although the costs of such "merchandising' items were deducted from the total cost of materials, supplies, etc. during the processing of the report forms. (See Section 9 (g) below.)
Separate entries were required for each of the items (1), (2), and (3) above, as well as for the cost of work done for the reporting establishment on its own materials by other companies (contract work). The sum of these three items was deducted from value of products shipped (excluding resales) in order to obtain value added by manufacture. It should be noted that the cost of fuel consumed (including anthracite and bituminous coal, natural and manufactured gas, fuel oil, liquefied petroleum gas, and other fuels) does not include fuel when used as a material in the manufacturing process-for example, coal in the production of coke. costs were included with other materials under item (1) above.
b. Definition of "Inventories":
The values of beginning-of-year and end-ofyear inventories, respectively, were requested of all operating manufacturing establishments in the surveys, except those in the Printing and publishing industries group. As in the 1947 Census, 1949-1952 annual survey inventories data were collected under two major categories: (1) finished products, and (2) materials, supplies, work-in-process, fuel, and all other inventories. In the 1953 Annual Survey, however, separate inventories figures were obtained for: (1) finished products, (2) work-inprocess, and (3) materials, supplies, fuel, etc.
(i.e., other manufacturing plants, wholesale branches, central warehouses, etc.). For 1953, 1952, and 1951 goods that were resold in the same condition as when purchased were also reported in the shipments item. The value of such "resales" were deducted, however, from the total value of products shipped during the processing of the report forms. (See Section 9 (g) below.)
Products made by an establishment. from materials owned by another establishment were included only in the shipments reported by the latter plant. The payments received by the former establishment for such work were reported by it in the shipments section of the form as "receipts for contract work.''
d. Shipments, by Classes of Products:
The value of shipments shown for a class of products is not necessarily equal to the total production of that class of products during the year. In addition to net inventory changes, a difference between production and shipments may result from the integrated operations of manufacturing plants. Some commodities, instead of being shipped, are used for further manufacture in the plants producing them. Data for such intermediate production at the same establishment are usually not reflected in the totals for a particular product class. For example, a plant that is engaged in such integrated operations as (1) producing cotton yarn, (2) weaving the yarn into fabrics, and (3) producing and shipping apparel, would report the value of shipments of apparel but would not report separately the value of the yarn or fabrics going into the production of such apparel.
The number of product classes for which data are shown in 1953, 1952, and 1951 has been increased considerably over that shown in earlier annual surveys. In general, data have been with- · held only for those product classes for which the standard error of estimate exceeds 15 percent, although a small number of estimates are withheld on the basis of reasonableness when compared with related data, or for considerations of national security. As a result, estimates are shown for almost 600 of the 1,000 product classes, accounting for approximately four-fifths of all manufacturers' shipments. In addition, year-to-year relative changes are shown for 180 additional product
It should be noted that the estimates for approximately 100 of the product classes were derived from the Bureau's Facts for Industry surveys, or from commodity surveys of other Federal agencies in which the coverage was more complete than in the Annual Survey of Manufactures. (Part II of this volume presents a summary of all commodity data collected in the Facts for Industry series. A more detailed discussion of these series is given in the introductory text preceding Part II.)
An added feature of the product class table is the inclusion of "4-digit" group totals or product classes, where the degree of duplication among the product classes is not excessive. These sums represent the total value of shipments of product classes wherever made" (i.e., regardless of the industry classification of the establishments reporting such product class values). Such totals, of course, are particularly useful where several individual product classes in a group have been withheld because of high sampling errors.
The total shown for these "4-digit" aggregates should not be confused with the total value of shipments of establishments classified in the industry, including shipments of product classes regarded as "secondary" to the industry. On the other hand, the value shown for a product class (5-digit) represents total shipments of that class by all establishments, regardless of industry classification. Thus, the value shown for a "4-digit" aggregate of product classes represents the total value of products shipped by all industries.
e. Duplication in Cost of Materials and Value of Products Shipped Totals:
The aggregate of the cost of materials and value of shipments figures for industry groups and for all manufacturing industries combined includes large and unknown amounts of duplication, due to the use of the products of some industries as materials by other industries. With some important exceptions, such as "Blast furnaces and steel mills'' and "Motor vehicles and parts," this duplication is not significant within individual industries. More usually, it arises from the addition of values reported by other related industries, which represent successive stages in the production of finished manufactured products. Examples are the addition of Flour mills figures to Bakeries figures in the "Food and kindred products" group, and the addition of Pulp mills totals to Paper and board mills totals in the "Paper and allied products" group. Estimates of the over-all extent of this duplication indicate that the value of manufactured products shipped, exclusive of such duplication--namely, the value of finished' manufactures-tends to approximate two-thirds of the total value of products shipped reported in the annual surveys. Because of the unknown and varying amounts of duplication contained in the cost of materials and in the value of products shipped, these figures are not shown for industry groups and States. They are also omitted for a small number of individual industries for which the proportion of duplication in value of shipments among establishments within the industry is believed to exceed 10 percent.
f. Value Added by Manufacture:
''Value added by manufacture" measures the approximate value created in the process of manufacture. It provides the most satisfactory census measure of the relative importance of given industries for the United States as a whole or
for geographic areas. Value added is calculated by subtracting the cost of materials, supplies, containers, and fuel consumed, purchased electric energy, and contract work from the value of prodcuts shipped. (Both the cost and value of merchandise resales are excluded from this calculation).
Value added by manufacture should not be confused with "income produced in manufacturing. The latter figure is compiled by the Office of Business Economics, Department of Commerce. The main difference between these two measures arises from the fact that income produced excludes, in addition of cost of materials, such additional costs as depreciation, the labor costs involved in maintenance and repairs, State and local taxes (other than corporate income taxes), advertising, etc. These deductions in the income produced estimates of the Office of Business Economics are partly offset, however, by the inclusion of employer contributions to Social Security as a form of income, and by the fact that the national income estimates are to a large extent prepared on a company rather than an establishment basis.
g. Products Bought and Resold Without Further Manufacture("Resales''):
The report forms for the annual surveys covering 1949 and 1950 included a separate inquiry for reporting the merchandising" activity of manufacturing plants, i.e., goods that were resold in the same condition as purchased. For 1953, 1952, and 1951, however, the merchandising inquiry was integrated with the costs and shipments inquiries of the report form, the cost of such goods being required in the cost of materials question (Item 6), and the value of their resales being asked in the shipments section (Item 10). It should be noted, however, that the merchandising data are subtracted out from both the costs and shipments totals, to arrive at net materials costs and net shipments values for the manufacturing activities of the plant.
distribution and mill work; poultry dressing and fresh egg distribution; feed milling and distribution of hay, grain, etc.; ice manufacturing and fuel distribution; and meat processing and meat distribution.
10. Expenditures for New Plant and Equipment
In the annual surveys, as in the 1947 Census, manufacturers were requested to report expenditures made during a specified year for permanent additions and major alterations to their plant and for new machinery and equipment that were charged to the fixed asset accounts of the individual establishment and were of a type for which depreciation accounts are ordinarily maintained. As annual survey coverage is restricted to establishments that were in operation at some time during the report year, the MA-100 annual survey reports generally do not include expenditures made during that year for constructing and equipping new plants, or for renovating idle ones. To close this statistical gap, such supplemental capital expenditures data have been obtained, since 1951, in conjunction with the Annual Survey. A special report form, MA-101 (reproduced in Appendix D), is used for this purpose. For 1953, it was distributed (a) to the 900 largest manufacturing companies in the United States, (b) to other companies in the Annual Survey which were known to have new manufacturing establishments under construction, and (c) to a subsample of about 600 of the remaining companies in the Annual Survey sample.
In addition to the total estimates for all manufacturing establishments, estimates of new capital expenditures are presented separately in the volume for establishments in operation and for establishments under construction or renovation. Since data on the latter type of capital outlays were collected for the first time in 1951, only the 1951 to 1953 estimates for establishments in operation are directly comparable with figures published in earlier censuses and Annual Surveys.
An analysis of resales data for 1951, 1952, and 1953 indicates that such resales by operating manufacturing plants amounted to roughly 2 to 3 percent of their receipts for manufacturing activities. Information on merchandising transactions has been helpful in determining whether establishments engaged in a combination of manufacturing and nonmanufacturing activities properly fall within the scope of the annual survey.
The areas in which a combination of manufacturing and nonmanufacturing operations were most frequently reported are as follows: petroleum
The Census estimates of capital expenditures differ from those published in the joint Office of Business Economics-Securities and Exchange Commission survey. In addition to normal sampling variation, a major source of difference is to be found in the scope of coverage. The Census data relate only to manufacturing establishments, whereas the OBE-SEC series cover all establishments operated by manufacturing companies, nonmanufacturing as well as manufacturing. On the other hand, manufacturing establishments of companies engaged primarily in nonmanufacturing activities are excluded from the OBE-SEC series but included in Census figures. Both series, it
For 1953 and 1950, statistics on the consumption of metal mill shapes and castings by metal fabricating plants were collected in the Annual Survey of Manufactures. The metal fabricating industries are classified in the four broad industrial groups: Fabricated Metal Products, Machinery (except electrical), Electrical Machinery, and Transportation Equipment. In addition, plants classified in the Iron and Steel Forgings Industry (3391) were included. In 1952 and 1951 such data were obtained on a quarterly basis by the Bureau of the Census on forms, NPAF-1 and NPAF-103 for the National Production Authority as part of the defense mobilization program. In order to avoid duplication of reporting by respondents, the Bureau of the Census omitted this item from its Annual Survey of Manufactures for those years.
The quarterly survey (NPAF-1) Report of Plant Operations," included approximately 8,000 of the larger plants classified in the metal fabricating industries with an average total employment of 100 or more in the 1947 Census of Manufactures. This survey was supplemented during 3 quarters of 1951 by a representative sample survey (NPAF103) of approximately 3,000 establishments selected from among the more numerous smaller plants.
In 1952, statistics were not collected from the smaller establishments on Form NPAF-103. In order to facilitate comparisons with earlier NPAF-1 figures and with other series the data collected were adjusted to approximate totals for all establishments by the proportion that each 4-digit industry was accounted for by the smaller establishments in the corresponding quarter of 1951.
b. Comparability of Data Published for 1953, 1952, 1951, and 1950:
For 1953 and 1950, plants in the metal fabricating industries reported their consumption of five types of metal mill shapes and castings: (1) iron castings; (2) carbon steel; (3) alloy steel, including stainless; (4) aluminum; and, (5) copper and copper-base alloys. Separate metals consumed data were collected for metals purchased (or received from other establishments of the same company), and for metals produced and consumed in the same establishment.
The 1952 and 1951 data include quantities produced and consumed in the same establishment, as well as purchases and interplant transfers. The data shown for 1953 and 1950, however, exclude quantities produced and consumed in the same establishment. These exclusions are described in detail in the headnotes and footnotes for these tables. As a result, 1953 and 1950 estimates are not comparable with those for 1952 and 1951.
The metals consumed were defined to cover only those processed to the mill or foundry level, excluding metals fabricated or otherwise processed beyond this level. Machined castings were considered as processed beyond the foundry level. The consumption estimates shown in the tables thus represent only the direct use of the specified mill shapes and castings, and not the total metal weight of the products of the given industry. For example, the steel consumption shown for the motor vehicles industry consists only of steel directly consumed in the form of rough castings, sheets, bars, wire, etc., and does not include the weight of metal in subassemblies, stampings, forgings, wire products, etc., produced in other industries.
The definitions of mill shapes on the surveys for 1953, 1952, and 1951 are similar to those for 1950 with a few exceptions. For 1953, 1952, and 1951, aluminum foil and certain ferrous wire products such as nails, staples, etc., were treated as mill shapes. Accordingly, the data on metals consumed in their production were not collected. However, establishments consuming these products were requested to report the tonnages consumed. In 1950, these materials were considered as fabricated products, and metal consumption data were obtained from the producers of such items. For all years beginning with 1950, insulated wire and cable was treated as a mill shape for which consumers were instructed to report the copper content only. Producers of insulated wire and cable excluded the consumption of copper in wire and cable output from their reports.
In 1950, steel castings were reported (depending on their type) as either carbon or alloy (including stainless) steel. For 1953, only a total figure for steel castings was collected and included carbon, alloy, and stainless steel castings. It is estimated that the consumption of alloy and stainless