1. Introduction

2. Establishments Covered in the Annual Survey

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The Annual Survey is an integral part of the industrial statistics program of the Bureau of the Census which reached its present development following the passage of legislation by Congress which shifted the Census of Manufactures from biennial to a quinquennial basis. The law provides for a complete and comprehensive Census every five years with a sample survey of manufacturing industries in the intervening years. Key measures of manufacturing activity by industry and geographic area (value added by manufacture, employment, manhours, payrolls, capital expenditures, etc.) are thus maintained continuously in an annual time series. The industrial statistics program also provides for coverage, on an annual, quarterly, or monthly basis, of the production or shipments of important commodities in separate commodity surveys. The product class information collected in the Annual Survey of Manufactures fills important gaps in the Bureau's commodity survey program.

and

The Annual Survey is designed to yield estimates of general statistics for industry groups, important individual industries, geographic divisions, States, and the sixty-two largest standard metropolitan areas. The area data are further subdivided by major industry group. It also provides broad industrial and geographic totals for inventories, fuels, capital expenditures, as well as United States totals for the more important classes of products shipped by manufacturing establishments. To meet the needs for small area manufacturing data, comparable county-by-industry group employment figures have been developed for some annual survey years in the County Business Patterns series published jointly by the Bureau of the Census and the Bureau of Old-Age and Survivors Insurance. The latest publication of such data covers the first quarter of 1956. This over-all program, it is believed, meets the needs of industry and Government for industrial statistics at a considerably lower cost than the previous program, in which a complete Census of Manufactures was taken every second year.

2. Establishments Covered in the Annual Survey of Manufactures a. Definition of Manufacturing Establishment

Following previous Census procedures, Annual Survey data are collected on reports received from individual manufacturing establishments. The term "establishment' denotes a single plant or factory in which manufacturing operations are

performed. A company that operates in more than one location is required to submit a separate establishment report for each location. In some instances, companies engaged in distinctly different lines of activity at one location are requested to submit separate reports for these activities if the plant records permit such a separation and the operations are substantial in size. For single establishment companies, the reporting establishment is identical with the company. Some 250,000 of the approximately 280,000 manufacturing establishments in the United States are operated by single establishment companies. In addition, there are approximately 8,000 firms engaged in manufacturing that operate more than one establishment. These multi-establishment firms operate somewhat more than 30,000 manufacturing establishments.

The 1957 Annual Survey of Manufactures, as other Annual Surveys and the 1954 and 1947 Censuses, includes only establishments with one or more employees at any time during the year. Thus, manufacturing establishments operated by individual proprietors or partners with no paid employees, are excluded from the scope of the 1957 Annual Survey of Manufactures.

b. Definition of Manufacturing Industries

The Annual Survey of Manufactures continues the industry classifications of the 1954 Census of Manufactures as defined in the Standard Industrial Classification Manual Volume I, Manufacturing Industries, dated November 1945, as amended by the Bureau of the Budget. A full description of each of the 1954 Census industries is published in the 1954 Census of Manufactures Volumes.

An industry consists of a group of establishments that are primarily engaged in the same or similar lines of economic activity. In the manufacturing field, the line of activity is usually defined in terms of the types of products made, although in some instances the determination is based on materials consumed or process of manufacture.

Manufacturing is defined in the Standard Industrial Classification as the mechanical or chemical transformation of inorganic or organic substances into new products. Operations which change the shape or form of materials, such as machining and stamping, are defined as manufacturing. The assembly of component parts into a finished product is also considered to be manufacturing if the resulting product is neither a structure nor other fixed improvement, These activities are usually carried on in plants, factories, or mills, which characteristically use power-driven machines and materials-handling equipment.

Manufacturing production is usually carried on for the wholesale market, for transfer to other plants of the same company, or to the order of industrial or governmental users rather than for direct sale to the household consumer. Some manufacturers in a few industries, however, sell chiefly at retail to household consumers through the mail, through houseto-house routes, or through salesmen. Some activities of a service nature (enameling, engraving, etc.) are included in manufacturing when performed primarily for the trade but are considered nonmanufacturing when performed primarily to the order of the household consumer.

The following types of activities, while having many of the characteristics usually found in manufacturing, are defined as nonmanufacturing by the Standard Industrial Classification and, therefore, are excluded from the Annual Survey of Manufactures:

(a) Processing on farms when the raw materials are grown on the farm and the manufacturing activities (poultry dressing, milk and butter production, logging) are on a small scale without extensive use of paid labor. Also custom milling, cotton ginning, and similar activities.

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