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Connecticut Economic Digest: December 2002 issue
Nonfarm Employment Data under NAICS | Occupational Profile: Accountants and Auditors |Town/City Profile: Marlborough | Industry Profile: Local and Interurban Transit | Industry Clusters | Housing Update

Nonfarm Employment Data under NAICS
By Salvatore A. DiPillo, Labor Statistics Supervisor, DOL

The publication of January 2003 nonfarm employment data in March of next year, will mark the conversion of these data from the Standard Industrial Classification System (SIC) to the North American Industry Classification System (NAICS). After the switch to NAICS, SIC-based nonfarm employment data will no longer be produced or published. Historical time series back to 1990 will be reconstructed as part of the NAICS conversion process.

What is NAICS?

As was explained in detail in earlier Digest articles (please see "NAICS Implementation is Underway," February 2002), NAICS is the product of a collaborative effort between the United States, Canada, and Mexico. Sharing a common classification system allows, for the first time ever, direct comparison of economic data across borders in North America.

NAICS is a "clean slate" revision of the system we use to classify establishments by industry. Unlike previous SIC revisions, the NAICS changes are fundamental. They recognize hundreds of new businesses in our economy, largely in the fast-growing service sector. NAICS is a production-oriented system; production units that use identical or similar processes are grouped together. Under the SIC, businesses are grouped by their end products and services.

NAICS doubles the number of top-level groupings of industrial classifications. The highest level of NAICS classification is called the sector, and corresponds roughly to the major industry division in SIC. There are 20 broad sectors in NAICS, compared with only 10 divisions in SIC. There is increased detail in services, with new sectors such as information; professional, scientific, and technical services; and administrative and support, waste management and remediation services. There is also a new accommodation and food service sector.

The Bureau of Labor Statistics has further aggregated NAICS sectors into groupings they have designated "supersectors" (please see table on the front page). Nonfarm employment data will be published for these supersectors as well as sectors and detailed industries. Also, the aggregations to goods producing and service providing industries will be retained. All publicly-owned establishments including those owned by Native American tribal governments will remain classified in government.

Historical Series

The Connecticut DOL's Office of Research will be providing historical nonfarm employment data series for NAICS industries from 1990 forward. (Hours and earnings data will not be reconstructed prior to January 2001.) The monthly nonfarm employment data our office develops and publishes each month depends on Unemployment Insurance (UI) records as a sample frame and for benchmark levels. In creating the historical series, a primary input was a longitudinal database of employers' UI accounts. The NAICS industry a firm was coded to in the first quarter 2001 was carried back for the entire history of that establishment's data within the longitudinal database. If a firm did not have an assigned NAICS code for the first quarter 2001, or went out of business prior to the first quarter 2001, then a NAICS code for this firm was assigned by one of two methods. For those establishments whose SIC code directly matched to a NAICS code, they were assigned the appropriate NAICS code. If there was not a direct SIC-to-NAICS match, the establishment was assigned the NAICS code of an establishment closest in employment and sharing the same SIC.

The 1990 - 2000 data reconstruction methodology has the advantage of using actual microdata and, by keeping NAICS codes constant throughout the history of the longitudinal database, the effects of coding errors and corrections over the ten years were eliminated. Conversely, holding NAICS codes constant eliminates any true economic changes that may have occurred at establishments.

Publication Schedule and Detail

Connecticut, along with other states, will begin publishing NAICS-based employment, hours and earnings data starting with the release of January 2003 data in late March 2003. At the same time NAICS-based data for 1990 through 2002 for Connecticut and its ten labor market areas will be released. All national nonfarm employment, hours and earnings series will begin publication under NAICS in June 2003 with the release of May 2003 preliminary estimates, coinciding with the publication of the national March 2002 benchmark revisions. Once the conversion to NAICS is complete, current SIC-based data will no longer be available.

All NAICS employment series with at least 30 sampled UI accounts or at least 50 percent of universe employment coverage and 3,000 universe employment were considered for publication. Connecticut's statewide estimates will provide the most industry detail with labor market areas providing somewhat less detail. At the very least, employment data will be published for the NAICS supersectors, except for the three smallest labor market areas, Danielson, Lower River and Torrington, whose small size necessitate further industry aggregation to produce reliable employment estimates.

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Occupational Profile: Accountants and Auditors
By Michael H. Zotos, Ed.D., Associate Research Analyst, DOL


Now, more than ever, accountants and auditors play a very critical role in the design, compilation, and structure of individual and business financial records. Accounting, as a profession, is as important as law and banking in order to influence factors leading to success and opportunities. Given the present economic times, valid and reliable financial statements are required not only for accountability factors, but also for determining profitability. These conditions require highly trained, certified, and qualified professionals.

What Do They Do?

Accountants and auditors assist in the design and set up of systems dealing with financial records, taxes, and the computerization of all the above. Most important is the need to direct and assist entrepreneurs and individuals on a personal basis. Some other responsibilities include guidance with cash flow, advice on auditing procedures, and help with the determination of tax returns and tax planning. With the volume and complexity of requirements for tax filing, a professional approach is almost mandatory. In the world of business, everything is intertwined; banking, law, and government are a few areas which affect the lifeline of a business entity.

According to the Standard Occupational Classification System, there are four major fields of accounting and auditing. They are public accountants, management accountants, government accountants and auditors, and internal auditors. Public accountants deal with general and specialized areas of accounting. Many of these persons are Certified Public Accountants (CPAs). They may own their own business or work with a public accounting firm. Often they are employed as consultants and offer recommendations in many specialized areas such as taxes, fringe benefits, retirement programs, and payroll, including data processing.

Management accountants work at the corporate level and prepare long range plans involving cash flow, financial and cost analysis, and budgeting. They usually work as part of a management team and share their knowledge with other key members in sales, marketing, purchasing, production, and personnel.

Federal, state, and local government employ government accountants and auditors. These persons audit taxes and other financial information and enforce rules and regulations at their respective levels. They review individual, corporate, and small business taxes and financial matters. At the federal level, they may be employed by the Internal Revenue Service, Federal Bureau of Investigation, and other government departments. In some cases, they check on overseas citizens and businesses regarding the reporting of tax information. One area of accounting, which is currently under review, deals with business fraud. Reviewing the reporting of valid financial data is a current priority with government auditors.

The final category of accounting is internal auditing. These persons are responsible for inspecting accounting methods, reporting and procedures, and making recommendations should there be shortcomings in the system. Their primary task is to bring attention to fraud and the squandering of money and assets in the operation of government and corporate business.

Education and Training

There were approximately 863,000 accountants and auditors in the United States and 12,830 in Connecticut in 2000. Most positions in the accounting and auditing field require a bachelor's degree. There are cases where accountants hold fewer qualifications; however, in order to move ahead in the profession, additional training and experience are necessary. This is true with regard to CPAs. This classification involves further training above the bachelor's level and the ability to pass a required and rigorous examination. In Connecticut, there are thirteen colleges that offer training for the position of accounting and auditing.


Accountants and auditors in Connecticut earn an average annual wage of $55,655. The Stamford, Danbury, Waterbury and Bridgeport areas reflect higher earnings, while the New Haven, Hartford, and New London labor market areas are below the State average.

Employment Outlook

The projected employment growth rate for accountants and auditors in Connecticut through 2008 is eight percent, with over 400 total openings annually. As the economy moves away from recessionary forces and into an expansion mode, there will be a growing need for accountants and auditors.

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Town/City Profile: Marlborough
By Mark Stankiewicz, Operations Coordinator, DOL


Marlborough is a suburban town of 23.5 square miles, located in central Connecticut, that borders Glastonbury, East Hampton, Colchester, and Hebron. With a population increase of only three percent over the past decade and a population density of 246 persons per square mile, Marlborough continues to offer rural charm for its residents.

In 2001, Connecticut Magazine ranked Marlborough third behind only the State's Gold Coast towns of Redding and Easton in its listing of the most desirable municipalities with populations between 4,700 and 10,000. Marlborough compared well among all the towns in this population group in the quality of the public schools, the state of the local economy, the crime rate, and the availability of leisure and cultural resources. The town falls short only in the cost of living, as local property taxes have been steadily increasing due to school building projects.


Marlborough's popularity lies in its location and proximity to Connecticut Route 2, which links it to Norwich, New London, Middletown, Willimantic and Hartford, none of which is more than 45 minutes away. Commuting patterns indicate that 58 percent of Marlborough residents work in East Hartford, Glastonbury, Hartford, Manchester, and Wethersfield, respectively. On the other hand, 65 percent of Marlborough's workforce drive in from the neighboring towns of Colchester, East Hampton, Hebron, Glastonbury, and Wethersfield.

Although rural, Marlborough has developed a reputation as a viable place to do business. The town is home to Intelligent Motion Systems, Inc. (IMS), one of the fastest-growing technology companies in Connecticut and the nation, and one of the top manufacturers of motion control products in the world. SPM Instruments, Inc. is an international company manufacturing sophisticated mechanical, failure-prevention diagnostic equipment. The A.E. Aubin Company manufactures a complete line of rotary and vibratory tumblers, and abrasive blasters. For over 40 years, Marlborough Plastics has offered custom injection molding for the aerospace, electronics, and sporting goods industries.

Marlborough also has a variety of service-related companies and retail and dining establishments. Diversified Group Brokerage and Health Plan Services is a major provider of personal health insurance coverage for individuals and employers. The Marlborough Barn is nationally known for authentic Early American home furnishings, folk art and collectibles. The New Sadler's Ordinary Restaurant offers fine colonial-styled dining. The historic Marlborough Tavern, once visited by President George Washington, provides an even more authentic colonial dining atmosphere.

As the table indicates, many of Marlborough's jobs are concentrated in the services, finance, insurance and real estate (FIRE), and retail trade sectors. Over the last decade, services sector employment has shown an increase of almost 100 jobs and a 78 percent jump in wages to $29,724. For this same period, employment in the FIRE and retail trade sectors has been steady. Manufacturing continues to be a strong part of Marlborough's local economy, with the number of jobs tripling and offering some of the highest average wages ($43,458). Overall, the total number of jobs increased by 15 percent while the average wages paid to workers employed in Marlborough increased by 45 percent over the last ten years.


The emphasis on education has become a top priority for the town of Marlborough. A two-year renovation project for the Elmer Thienes-Mary Hall Elementary School, which began in June 2002, will address serious building code violations and space issues, while adding classrooms and computer labs. Marlborough also has been the driving force behind the construction of a new 247,000 square foot Regional Hebron Andover Marlborough (RHAM) High School. These efforts support Marlborough's commitment to providing the finest education facilities in the State. At this time, 91 percent of the town's high school graduates go on to study at institutions of higher learning, while 36 percent of its residents have at least a four-year college degree.

Future projects in the town include a new, state of the art medical facility for the Marlborough Family Practice and the Middlesex Hospital Immediate Care Center, which are both located in undersized buildings. These efforts will help Marlborough maintain its position at the top of Connecticut Magazine's list of desirable small towns for years to come.

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Industry Profile: Local and Interurban Transit
By Mark R. Prisloe, Chief Economist, DECD


Which industries are important to Connecticut? Surprisingly, to some, local and interurban transit (SIC 41) is among the most important. In fact, this industry was second only to insurance carriers, according to the size of its location quotient-an indicator of the concentration of employment in the industry in the State relative to its concentration nationally.

With a location quotient of 2.13, local and interurban transit stands out as the only industry besides insurance carriers above 2.0. But why is this significant? Economic development depends on good local transportation. It is a cornerstone that attracts and keeps businesses within our State. The contribution of local transportation to the economy is unquestionable-especially when one considers the amount of passenger service in the form of trains, buses, limousines, and commuter rails.


In 2001, employment in the industry averaged 13,889, the highest in the last 12 years (see chart). The number of establishments has remained fairly steady around 400 through the same period. Average annual wages in local transit in Connecticut were $24,108 in 2001 and have gained steadily in the last decade. Gross State Product, the total dollar value of all final goods and services produced statewide in this industry, exceeds half a billion dollars. Connecticut's strategic location between the major metropolitan areas of Boston and New York, the State's interstate highway corridors, its shoreline commuter rail, as well as ground transportation to major airports, are factors in making the industry outstanding in Connecticut's overall economic picture.


The Connecticut Department of Transportation's 2001 Master Transportation Plan notes that "ConnDOT owns urban fixed-route bus systems operating in the Hartford, New Haven, Stamford, Waterbury, New Britain, Bristol, Meriden, and Wallingford urban areas." Connecticut Transit, which is managed for the Department by First Transit, Inc. and is the largest operator in Connecticut, operates fixed-route and commuter bus services in the Hartford, New Haven, and Stamford service areas. Other private contractors provide bus service in the other five urban areas, as well as additional commuter express bus services into Hartford. Such an extensive system is undoubtedly one reason for the importance of this industry to Connecticut's economy.

Transportation and its related infrastructure such as roads, bridges, rail lines, terminals, and airports are critical to economic development. Their importance was underscored at a major summit in 2000, sponsored by leaders of the Connecticut General Assembly, that precipitated the eventual passage of legislation creating a new governance structure for Bradley Airport and a statewide Transportation Strategy Board.

Public Act 01-5 of the June Special Session, an Act Implementing the Recommendations of the Transportation Strategy Board created a fifteen member permanent Connecticut Transportation Strategy Board (TSB). About a year later, on January 15, 2002, the TSB submitted a full report, The Initial Transportation Strategy, and related documents to Governor Rowland and the General Assembly. ( has the full report).

Given the report's noted goals and challenges, intercity bus, commuter rail, and public transit, in general, are likely to grow in importance as agents of and contributors to Connecticut's diverse and expanding economy. And, in the 21st century, Connecticut transportation will be more important than ever as a means of moving people and goods. The role this industry plays in the overall economy - as highlighted in this profile - underscores the importance of building and maintaining the State's transportation infrastructure to ensure the continued viability of this sector to our high quality of life.

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Industry Clusters
Insurance and Financial Services Cluster Announced

Governor Rowland, in late October, announced the formation of the State’s newest industry cluster, Insurance and Financial Services (IFS). The formation of the cluster ensures that the State continues to compete as a primary location for insurance, asset management, banks and other financial services companies, specifically for their headquarters, major subsidiaries or divisions, or processing and other support functions. This marks the ninth cluster formed in the State.

It was noted that Connecticut is home to the nation’s largest and oldest insurance companies and banks as well as a wealth of asset management firms. Through the formation of the IFS cluster and an initial $100,000 in funding from the Department of Economic and Community Development underscores the State’s commitment to its continued growth.

Concurrently, ING announced plans to expand by creating a new Hartford-based business, dubbed the ING Financial Horizons Program, providing financial advisory services to pre-retirees and retirees. The unit is expected to create 100 new jobs in Hartford within two years.

The Governor’s Council on Economic Competitiveness and Technology spearheads Connecticut’s Industry Cluster Initiative. The initiative is based on the idea of nurturing key industries to improve their competitiveness and boost the overall economy.

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Permits Continue Strong Performance

Commissioner James F. Abromaitis of the Connecticut Department of Economic and Community Development announced that Connecticut communities authorized 924 new housing units in October 2002, a 12.7 percent increase compared to October of 2001 when 820 units were authorized.

The Department further indicated that the 924 units permitted in October 2002 represent a 19.5 percent increase from the 773 units permitted in September 2002. The year-to-date permits are up 4.0 percent, from 7,912 through October 2001, to 8,231 through October 2002.

The Stamford Labor Market Area (LMA) showed the largest gain of 56 units (or 133.3 percent), followed by the Hartford Labor Market Area with a gain of 43 units (or 14.6 percent) compared to a year ago. Norwalk led all Connecticut communities with 34 units, followed by Newtown with 30 and Stamford with 29. From a county perspective, New London County had the largest gain (23.4 percent) on a year-to-date basis.

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Published by the Connecticut Department of Labor, Office of Research
Last Updated: December 3, 2002