SUPPORTING STATEMENT - PART A
U.S. Department of Commerce
U.S. Census Bureau
Form (M-3(SD))
(OMB Control No. 0607-0008)
A. Justification
1. Necessity of the Information Collection
The U.S. Census Bureau is requesting an extension of the currently approved collection for the Manufacturers’ Shipments, Inventories, and Orders (M3) survey. This survey collects monthly data from domestic manufacturers on Form M-3 (SD), which is mailed at the end of each month. The form and transmittal letter are shown in Appendices A and B. Data requested are shipments, new orders, unfilled orders, and inventories by stage of fabrication. It is currently the only survey that provides broad-based monthly statistical data on the economic conditions in the domestic manufacturing sector. The survey is designed to measure current industrial activity and to provide an indication of future production commitments. The value of shipments measures the value of goods delivered during the month by domestic manufacturers. Estimates of new orders serve as an indicator of future production commitments and represent the current sales value of new orders received during the month, net of cancellations. Substantial accumulation or depletion of backlogs of unfilled orders measures excess (or deficient) demand for manufactured products. The level of inventories, especially in relation to shipments, is frequently used to monitor the business cycle.
This survey provides an essential component of the current economic indicators needed for assessing the evolving status of the economy and formulating economic policy. The Office of Information and Regulatory Affairs (OIRA), Office of Management and Budget (OMB) has designated this survey as a principal federal economic indicator. The shipments and inventory data are essential inputs to the gross domestic product (GDP), while the orders data are direct inputs to the leading economic indicator series. The GDP and the economic indicator series would be incomplete without these data. The survey also provides valuable and timely domestic manufacturing data for economic planning and analysis to business firms, trade associations, research and consulting agencies, and academia. The M3 survey is authorized by Title 13, United States Code, Sections 131, 182, and 193.
2. Needs and Uses
The data are used for analyzing short- and long-term trends, both in the manufacturing sector and as related to other sectors of the economy. The data on value of shipments, especially when adjusted for change in inventory, measure current levels of production. New orders figures serve as an indicator of future production commitments. Changes in the level of unfilled orders, because of excess or shortfall of new orders compared with shipments, are used to measure the excess (or deficiency) in the demand for manufactured products. Changes in the level of inventories and the relation of these to shipments are used to project future movements in manufacturing activity. These statistics are valuable for analysts of business cycle conditions including members of the Council of Economic Advisers (CEA), the Bureau of Economic Analysis (BEA), the Federal Reserve Board (FRB), the Department of the Treasury, business firms, trade associations, private research and consulting agencies, and the academic community.
Information quality is an integral part of the pre-dissemination review of information disseminated by the Census Bureau (fully described in the Census Bureau’s Information Quality Guidelines). Information quality is also integral to 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
One of the strategic objectives of the Census Bureau is to pursue the least burdensome means of collecting necessary information. To ease respondent burden, we permit companies to submit data in a format compatible with their internal computerized bookkeeping accounts. Respondents further are encouraged to submit data through the Centurion Internet Reporting System. The M3 collects ninety-nine percent of its data electronically.
Respondents have been submitting data through the Centurion Reporting System since November 2009. Respondents select a link on our web page or type the URL to allow them to enter data. Data received via the Internet are converted to an ASCII file and downloaded to our company database. This method of data collection is cost-effective as it reduces the number of monthly forms mailed. We currently receive about 2,600 reports monthly through the Centurion Reporting System.
4. Efforts to Identify Duplication
The Census Bureau makes a concentrated effort on a continuing basis to identify possible duplications, both within the agency and outside the agency, and to eliminate them whenever possible. The M3 survey is the only survey that provides broad-based monthly shipments, inventories, and orders statistics on the entire domestic manufacturing sector, as well as specific important industrial categories.
The Institute for Supply Management (ISM) collects opinion and directional information on shipments, inventories, and orders from a small sample of companies. There are other monthly surveys that cover narrowly defined subsectors of manufacturing, but no other public or private survey provides comprehensive monthly statistics for the entire U.S. manufacturing sector.
5. Minimizing Burden
For this survey, we generally do not request reports from companies with less than $500 million in annual shipments. However, for some of the industries made up primarily of small companies, the inclusion of several small companies is necessary to obtain sufficient coverage levels to produce reliable estimates.
6. Consequences of Less Frequent Collection
The data collected in this monthly survey provide policy makers with timely, current information essential to assessing the strength of the economy and analyzing short-term trends in the manufacturing sector. If the survey was conducted less frequently, timely knowledge, especially of unexpected developments, would be missing. Also, monthly data are needed by the BEA to make early estimates of quarterly GDP and by the Conference Board for calculations of the monthly economic indicators series.
7. Special Circumstances
The M3 survey is conducted monthly to meet the timeliness requirements documented in Section 6 above. As soon as the data can be accurately compiled, they are released in order to assist government policy makers, business decision-makers, and other data users in monitoring the direction of the economy.
8. Consultations Outside the Agency
Consultations with survey respondents take place regularly through company visits and telephone calls. These contacts cannot be listed because of their confidential status under Title 13, United States Code, Section 9. Through these contacts we gain considerable insight into the operations of manufacturers and have developed a cooperative rapport with respondents and analysts.
We also have continuing contact with the BEA within the Department of Commerce, the FRB, the CEA, the Department of the Treasury, and large numbers of financial and economic advisers, forecasters, and journalists, relative to the adequacy, accuracy, and timeliness of the data. Consultations with outside consultants were for the purpose of receiving individual opinions and not for the purpose of forming a group opinion. Comments generally show satisfaction with the data. In a 1997 correspondence from OMB, we were authorized to prerelease our aggregate non-individual identifiable data to the BEA to improve the coverage and accuracy of the GDP estimates.
Specific representatives to whom we provide data and have discussed the M3 programs are:
Representative and
Organization Telephone Number/E-Mail
Bureau of Economic Analysis Michael Armah
(202) 606-9721
Michael.armah@bea.gov
Federal Reserve Board Robyn Zevin
(202) 452-3898
ocdo-dmid@frb.gov
Council of Economic Advisers Adrienne Pilot
(202) 395-5110
Council of Economic Advisers Steven Braun
(202) 395-4666
sbraun@cea.eop.gov
The Conference Board Ataman Ozyildirim
(212) 339-0399
a.ozyildirim@conference-board.org
We published a notice in the Federal Register on August 28, 2014 (Volume 79, Page 51301-51302) inviting the public to comment on our plans to submit this request. One comment was received during the 60-day comment period. The comment was from the Bureau of Economic Analysis (BEA) stating that the BEA strongly supports this data collection because data collected in this survey are crucial to key components of BEA’s economic statistics. We followed up with BEA and thanked them for their support.
9. Paying Respondents
No respondents are paid or given gifts to report on our survey.
10. Assurance of Confidentiality
All data collected in the M3 survey are confidential under Title 13, United States Code, Section 9 and may be seen only by persons sworn to uphold the confidentiality of Census Bureau information and may be used only for statistical purposes. We inform respondents of the voluntary and confidential nature of this survey on the annual letter that we send to our contacts and in the instruction manuals which we provide on our website. (see Appendices B and E).
11. Justification for Sensitive Questions
There are no sensitive questions.
12. Estimate of Hour Burden
The estimate of total respondent burden hours to respond to this survey is 19,200 hours annually. This estimate was derived as follows:
Number of Annual Minutes per Burden
Survey Form Reporting Units Frequency Response Hours
Current panel
M3 4,800 12 20 19,200
We estimated the burden hours based on extensive contact with survey respondents. The estimated annual cost to the respondents is $669,312. We calculated this annual cost by multiplying the total burden hours by an average hourly wage of $34.86. The average hourly wage is that of an accountant, presented in the 2013 National Occupation Employment and Wage Estimate
publication, published by BLS.
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 carried 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 systems 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 practices and not specifically required for this information collection.
14. Cost to Federal Government
We estimate the total cost to the Federal Government for this program to be $3,650,000, all paid from Census Bureau appropriations.
15. Reason for Change in Burden
We adjusted the burden in the collection upward to reflect the increase of the current level of respondents to the survey.
16. Project Schedule
At the end of each month, we mail forms to the survey respondents requesting data for the month just ended. Although the due date printed on the report form is 15 days after its receipt, long-standing arrangements exist with most major companies for filing dates that are consistent with the closing of their books.
We tabulate, review, and analyze responses beginning about the 13th working day following the close of the report period.
The monthly publication of the data generally follows the schedule shown:
Report Scheduled Release Date
Advance Report on 18 working days after the end of the
Durable Goods reporting period at 8:30 a.m., or if
the 18th day is a Monday, the report is
issued on the 19th day
Manufacturers' Shipments, 23 or 24 working days after the end of
Inventories, and Orders the reporting period at 10:00 a.m.
Report (5 working days after the Advance Report)
Annual Benchmark Report as benchmark data become available
(the most recent was issued in May 2013)
An example of the Advance Report on Durable Goods is shown in Appendix C and an example of the Manufacturers' Shipments, Inventories, and Orders Report is shown in Appendix D.
The scheduled release dates occasionally do not match the above criteria due to scheduling conflicts with other government press releases.
17. Request to Not Display Expiration Date
The expiration date and OMB number will be displayed on the forms.
18. Exceptions to the Certification
There are no exceptions.
19. North American Industry Classification System (NAICS) Codes Affected
Data are collected for all manufacturing industries. Data are collected for NAICS subsectors 311 - 339. Under NAICS, we collect and tabulate data for 89 industry groupings. See NAICS industry groupings in Appendix E.
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| Author | allen001 |
| File Modified | 0000-00-00 |
| File Created | 2021-01-25 |