NACE Revision 2 classifications

The consulting engineering industry's NACE Rev. 2 classifications

Revision of relevant NACE Rev. 2 categories

Available are:

Background

Many European countries use a national version of the statistical classification of economic activities in the European Community (known as NACE, from the French acronym), with some additional sub-categories specific to the national economy.

EFCA plans to respond to Eurostat's request for proposals to revise the European Union's NACE Revision 2 classification of economic activities. The response will be in two parts dealing with:

  • NACE 71.12 (the consulting engineering industry's principal activity - See Appendix 1) that has national versions;
  • other NACE categories that together with NACE 7112 make up the consulting engineering industry's overall activity, as described below.

When categorising engineering services, a further distinction is made between (see Appendix 1):

  • construction related activities;
  • non-construction related activities that are more difficult to classify.

Based on the demand for consulting engineering services generated by investment, non-construction-related demand in Europe accounts for a substantial (some 25%) share of total demand (see Appendix 1). Activity classifications should therefore not ignore the importance of non-construction related activity.

Introduction

The NACE Rev. 2 classifications that make up the consulting engineering industry's activities are:

  • Mining support service activities 09
  • Architectural & engineering activities; technical testing and analysis 71
  • Scientific R&D 72
  • Other professional, scientific and technical activities 74
  • Services to buildings & landscape activities 81

There are also some exclusions to the above classifications that may include consulting engineering services and may need to be treated as consulting engineering activities, see Exclusions that include consulting engineering services.

Classifications that need consideration because other activities are often associated with the consulting engineering activity are :

  • 7490: some preliminary upstream consultancy to advise project developers before a project is scheduled to go ahead (e.g., cost estimations) is likely to be classified under 7490.

  • 7120: inspection and technical analysis ex post is likely to be classified under 7120.

  • 7022: some engineering forming part of management consulting for a large-scale engineering project is likely to be classified under 7022.

  • 74.10: pure design of the final product without any development or management of the project is likely to be classified under 7410.

Also important is that some consulting engineering firms now provide other firms with engineers and technical personnel and are classified under NACE 7810 (Activities of employment placement agencies).

Eurostat NACE Rev. 2 revision

Eurostat has asked EFCA to propose changes to the NACE Rev. 2 classification of economic activities.

The consulting engineering industry's NACE classifications are summarised below (the "." separator has been removed from the NACE designations given in Eurostat's NACE Rev . 2 manual).

Included in the table are proposed changes to the various classifications to adjust for changes in the industry's make up and services.

These proposed changes will be the basis of a questionnaire that will be sent to EFCA Member Associations.

Notes are given in curly backets " { } ".

Relevant classifications to be considered for the NACE revison are:

  • A. Classifications that currently are considered to cover consulting engineering
  • B. Current exclusions from Type A that need to be reconsidered
  • C. Activities that are not currently considered as Type A (including consulting engineering activities) are not excluded (Type B)
  • D. New exclusions in existing categories to ensure that new 7112 activities are not misclassified elsewhere.

A. Classifications that currently are considered to cover consulting engineering

71

Architectural and engineering activities; technical testing and analysis

Architectural services, engineering services, drafting services, building inspection services & surveying & mapping services, physical, chemical, & other analytical testing services.

711

Architectural services, engineering services, drafting services, building inspection services, surveying & mapping services & the like.

7111

Architectural consulting activities

  • building design & drafting
  • town & city planning
  • landscape architecture
  • architectural design { added from 7410 exclusion

Excludes

  • activities of computer consultants, 6202, 6209
  • interior decorating, see 7410
  • { "aspects of town & city planning" exclusion proposal}

7112

PROPOSED ADDITIONS/CHANGES TO CURRENT IN UPPER CASE

  • engineering design (i.e. applying physical laws and principles of engineering in the design of machines, materials, instruments, structures, processes & systems) for:
    • machinery, industrial processes and industrial plant
    • projects involving civil engineering, hydraulic engineering, traffic engineering
    • water management projects
    • projects elaboration and realisation relative to WATER SUPPLY, WASTE WATER TREATMENT, electrical & electronic engineering, mining engineering, chemical engineering, STRUCTURAL ENGINEERING, mechanical, industrial & systems engineering, HEALTH & safety
  • consulting activities for:
    • machinery, industrial processes and industrial plant
    • projects involving civil engineering, hydraulic engineering, traffic engineering
    • water management projects
    • projects elaboration and realisation relative to WATER SUPPLY, WASTE WATER TREATMENT, electrical & electronic engineering, mining engineering, chemical engineering, STRUCTURAL ENGINEERING, mechanical, industrial & systems engineering, HEALTH & safety engineering
  • elaboration of projects using air conditioning, refrigeration, sanitary & pollution control engineering, acoustical engineering etc.
  • geophysical, geologic & seismic surveying
  • geodetic & ARIAL surveying activities:
    • land and boundary & INFRASTRUCTURE
    • hydrologic
    • subsurface
    • cartographic & spatial information

INCLUSION PROPOSALS

  • { "built environment infastructure planning" { some countries put planning for towns and cities in 7112, e.g., Finland; inclusion proposal}

  • { "arial imaging and imagery analysis" inclusion proposal }

  • { "integrated nature-based building, infrastructure and landscape design solutions" inclusion proposal }

  • { "performance testing of buildings and other structures" inclusion proposal }

  • { "building information modelling implementation and operation for civil engineering works and industrial plant" inclusion proposal }

  • { "design of prefabricated prefinished volumetric construction modules" inclusion proposal }

  • { "integrated engineering activities for design-build and turnkey projects" inclusion proposal }

  • { "engineering design", a 7410 exclusion, & "industrial & machinery design", a 7490 exclusion, is consolidated under "engineering design activities for industrial processes & production" proposal }

  • { project supervision activities for:

    • industrial plant projects involving civil engineering, hydraulic engineering, traffic engineering
    • water management projects
    • projects realisation relative to WATER SUPPLY, WASTE WATER TREATMENT, electrical & electronic engineering, mining engineering, chemical engineering, STRUCTURAL ENGINEERING, mechanical, industrial & systems engineering, HEALTH & safety engineering" proposal }

Excludes

PROPOSED ADDITIONS/CHANGES TO CURRENT IN UPPER CASE

  • test drilling in connection with mining operations 9010, 9090
  • development or publishing of associated software, 5829, 6201
  • activities of computer consultants 6202, 6209
  • technical testing 7120
  • R&D activities related to engineering 7219
  • industrial design, part of 7410
  • { "greenery solutions other than integrated nature-based solutions" 8130 exclusion proposal }

EXCLUSION PROPOSAL

  • { aerial photography part of 7420 proposal }

712

Technical testing & analysis

Technical testing & analysis and similar services.

7120

Technical testing & analysis

  • physical, chemical and other analytical testing of all types of materials and products, such as:
    • acoustics and vibration testing
    • testing of composition and purity of minerals etc.
    • testing activities in the field of food hygiene, including veterinary testing and control in relation to food production
    • testing of physical characteristics & performance of materials, such as strength, thickness, durability, radioactivity etc.
    • qualification & reliability testing
    • performance testing of complete machinery: motors, automobiles, electronic equipment etc.
    • radiographic testing of welds and joints
    • failure analysis
    • testing and measuring of environmental indicators: air and water pollution etc.
  • certification of products, including consumer goods, motor vehicles, aircraft, pressurised containers, nuclear plants etc.
  • periodic road-safety testing of motor vehicles
  • testing with use of models or mock-ups (e.g. of aircraft, ships, dams etc.)
  • operation of police laboratories

Exclusion

  • testing of animal specimens, see 75.00
  • diagnostic imaging, testing & analysis of medical & dental specimens, see 86
  • { no overlap envisaged with engineering activities & related technical consultancy 7112 }
  • { "performance testing of buildings" 7111 7112 exclusion proposal }

Consulting engineering activities other than excluded 7112 activities that are classified under 7120

  • testing of physical characteristics & performance of materials
  • performance testing of complete machinery

Classification issues

NACE 7112 activities often interface with or are combined with other NACE 71 activities, notably 7022, 7111,7120,7410, 7490 .

  • Preliminary consultation before a project commences may involve 7490:

    • cost estimations construction economists)
    • environmental consulting
  • Ex poste inspection and technical analysis

    • generally carried out under 7120.
  • Land surveyors

    • included in 7112, but they only represent 2% of 7112.
  • Management consulting

    • part of the 7022 (Business and other management consulting services). However, firms providing 7112 offer management consulting with large-scale engineering projects.
  • Specialised design

    • the design of a final product without any development or management should be classified under 7410 (Specialised design services) but the entire activity (design plus development or management) is often classified under 7410. Building Information Modelling (BIM), a vital and growing activity, and related technologies such as virtual reality services may be treated in this way.
    • Ireland design policy structure needs to be incorporated into NACE:
      • design-intensive sectors (at least 30% design staff; more or less traditionally associated with design):
        • Specialised design (741 "Specialised Design Activities")
        • Architecture (711)
        • Engineering (7112 with civil & mechanical engineers excluded + NACE 1629 "Manufacture of Other Products and Woods" + NACE 264 "Manufacture of consumer electronics")
      • design emphasis sectors:
        • Advanced manufacturing (NACE manufacturing categories)
        • Built evironment (NACE "built evironment" categories, including gardeners and landscapers)

09

Mining support service activities

Specialised support services incidental to mining including exploration services as well as drilling, test-drilling or redrilling for oil wells, metallic & non-metallic minerals. Other typical services cover building well foundations, cementing oil and gas well casings, cleaning, draining &pumping mines, overburden removal services at mines, etc.

0910

Support activities for petroleum & natural gas extraction

  • oil and gas extraction service activities:
    • exploration services in connection with petroleum or gas extraction, e.g. traditional prospecting methods, such as making geological observations at prospective sites
    • directional drilling and redrilling; "spudding in"; derrick erection in situ, repairing and dismantling; cementing oil and gas well casings; pumping of wells; plugging and abandoning wells etc.
    • liquefaction and regasification of natural gas for purpose of transport, done at the mine site
    • draining and pumping services
    • test drilling in connection with petroleum or gas extraction
  • oil and gas field fire fighting services

Excludes

  • service activities performed by operators of oil or gas fields, 06.10, 06.20
  • specialised repair of mining machinery, 33.12
  • liquefaction & regasification of natural gas for purpose of transport, done off the mine site, 52.21
  • geophysical, geologic and seismic surveying 7112

Consulting engineering activities classified under 0910 other than excluded 7112 activities

  • none?

0990

Support activities for other mining & quarrying

  • support services required for mining activities of 05, 07 & 08:
    • exploration services, e.g. traditional prospecting methods, such as taking core samples & making geological observations at prospective sites
    • draining & pumping services, on a fee or contract basis
    • test drilling & test hole boring

Exclusions

  • operating mines or quarries on a contract or fee basis, 05, 07 or 08
  • specialised repair of mining machinery, 33.12
  • geophysical surveying services, on a contract or fee basis 7112

Consulting engineering activities other than excluded 7112 activities that are classified under 0990

  • possibly test drilling. However, Eurostat - for any drilling activities other than for mining (to find oil, gas or minerals ), classify under 4313 "Specialised construction activities"; for mining classify under 09 , so no 7112.
    { In 4313 Test drilling and boring have geophysical surveying services, on a contract or fee basis 7112 exclusion proposal }

72

Scientific R&D

Research is split into:

  • "basic research" - experimental or theoretical work undertaken primarily to acquire new knowledge of the underlying foundations of phenomena and observable facts, without particular application or use in view,
  • "applied research" - original investigation undertaken in order to acquire new knowledge, directed primarily towards a specific practical aim or objective.

Development is "experimental development" - systematic work, drawing on existing knowledge gained from research and/or practical experience, directed to:

  • new materials, products & devices: producing & improving substantially those already produced or installed
  • new processes, systems & services: installing & improving substantially those already produced or installed

7219

Other research & experimental development on natural sciences & engineering

  • research & experimental development on natural science & engineering other than biotechnological research & experimental development:
    • R&D on natural sciences
    • R&D on engineering & technology
    • R&D on medical sciences
    • R&D on agricultural sciences
    • interdisciplinary R&D, predominantly on natural sciences & engineering

Exclusion

  • { no overlap envisaged with engineering activities & related technical consultancy 7112 }

Consulting engineering activities other than excluded 7112 activities that are classified under 7219

  • none

74

Other professional, scientific and technical activities

Professional scientific and technical services (except legal and accounting activities; architecture & engineering activities; technical testing & analysis; management and management consultancy activities; R&D and advertising activities).

741

Specialised design activities

Specialised design covers fashion, industrial design, graphic design, interior decoration.

7410

Specialised design activities

  • fashion design related to textiles, wearing apparel, shoes, jewellery, furniture & other interior decoration and
    other fashion goods as well as other personal or household goods
  • industrial design, i.e. creating & developing designs & specifications that optimise the use, value & appearance of products, including the determination of the materials, mechanism, shape, colour & surface
    finishes of the product, taking into consideration human characteristics & needs, safety, market appeal in
    distribution, use & maintenance
  • activities of graphic designers
  • activities of interior decorators

Exclusion

  • design & programming of web pages 62.01
  • architectural design 7111
  • engineering design, i.e. applying physical laws & principles of engineering in the design of machines, materials, instruments, structures, processes & systems 7112
  • { "building information modelling implementation and operation" 7111 7112 exclusion proposal }

Consulting engineering activities other than excluded 7112 activities that are classified under 7410

  • none

7490

Other professional, scientific & technical activities n.e.c.

Activities generally delivered to commercial clients for which more advanced professional, scientific & technical skill levels are required, but does not include ongoing, routine business functions that are generally of short duration:

  • security consulting
  • agronomy consulting
  • environmental consulting
  • other technical consulting
  • activities of consultants other than architecture, engineering & management consultants
  • appraisal activities other than for real estate & insurance (for antiques, jewellery, etc.)
  • business brokerage activities, i.e. arranging for the purchase & sale of small & medium-sized businesses, including professional practices, but not including real estate brokerage
  • patent brokerage activities (arranging for the purchase & sale of patents)
  • bill auditing & freight rate information
  • weather forecasting activities
  • activities of quantity surveyors
  • activities carried out by agents & agencies on behalf of individuals usually involving the obtaining of engagements in motion picture, theatrical production or other entertainment or sports attractions & the placement of books, plays, artworks, photographs etc., with publishers, producers etc.

Exclude

  • activities of architecture & engineering consultants 7111 7112
  • industrial & machinery design 7112, 7112
  • activities of management consultants 7022
  • wholesale of used motor vehicles by auctioning 451
  • online auction activities (retail) 4791
  • activities of auctioning houses (retail) 4779
  • activities of real estate brokers 6831
  • bookkeeping activities, see 6920
  • veterinary testing & control in relation to food production 71.20
  • display of advertisement & other advertising design 7311
  • creation of stands & other display structures & sites 7311
  • activities of convention & trade show organisers 8230
  • activities of independent auctioneers & administration of loyalty programmes 8299
  • consumer credit & debt counselling 8899

Consulting engineering activities other than excluded 7112 activities that are classified under 7490

  • security consulting
  • agronomy consulting
  • environmental consulting
  • other technical consulting
  • activities of consultants other than architecture, engineering & management consultants
  • appraisal activities

81

Services to buildings & landscape activities

Includes provision of landscape care & maintenance services & provision of these services along with the design of landscape plans and/or the construction (i.e. installation) of walkways, retaining walls, decks, fences, ponds, & similar structures.

813

Landscape service activities

Landscape service activities greenery fpr landscalpes and sites.

8130

Landscape service activities

  • planting, care & maintenance of:
    • parks & gardens for:
      • private & public housing
      • public & semi-public buildings (schools, hospitals, administrative buildings, church buildings etc.)
      • municipal grounds (parks, green areas, cemeteries etc.)
      • highway greenery (roads, train lines & tramlines, waterways, ports)
      • industrial & commercial buildings
    • greenery for:
      • buildings (roof gardens, façade greenery, indoor gardens etc.)
      • sports grounds (football fields, golf courses etc.), play grounds, lawns for sunbathing & other recreational parks
      • stationary & flowing water (basins, alternating wet areas, ponds, swimming pools, ditches, watercourses, plant sewage systems)
  • plants for protection against noise, wind, erosion, visibility & dazzling

Exclusion

  • commercial production & planting for commercial production of plants, trees 01, 02
  • tree nurseries & forest tree nurseries 01.30, 02.10
  • keeping the land in good environmental condition for agricultural use 01.61
  • construction activities for landscaping purposes F
  • landscape design & architecture activities 7111
  • { "nature-based integrated building, infrastructure & landscape design solutions" 7111 7112 exclusion proposal }

Consulting engineering activities other than excluded 7112 activities that are classified under 8130

  • part of construction activities for landscaping purposes
  • part of landscape design & architecture activities

B. Current exclusions from Type A that need to be reconsidered

5829

Other software publishing

  • publishing of ready-made (non-customised) software, including translation or adaptation of non-customised software for a particular market on own account:
    • operating systems
    • business and other applications

Excludes

  • reproduction of software 1820
  • retail sale of non-customised software 4741
  • production of software not associated with publishing, including translation or adaptation of non-customised software for a particular market on a fee or contract basis 6201
  • on-line provision of software (application hosting and application service provisioning) 6311
  • No overlap envisaged with engineering activities & related technical consultancy 7112

6201

Computer programming activities

  • writing, modifying, testing & supporting of software
  • designing the structure and content of, and/or writing the computer code necessary to create & implement:
    • systems software (including updates and patches)
    • software applications (including updates and patches)
    • databases
    • web pages
  • customising of software, i.e. modifying & configuring an existing application so that it is functional within the clients’ information system environment

Excludes

  • publishing packaged software 5829
  • translation or adaptation of non-customised software for a particular market on own account 5829
  • planning & designing computer systems that integrate computer hardware, software & communication technologies, even though providing software might be an integral part 6202
  • { no overlap envisaged with engineering activities & related technical consultancy 7112 }

6202

Computer consultancy activities

Planning & designing of computer systems which integrate computer hardware, software & communication technologies.
Services may include related users training.

Note: the products of a candidate ICT services industry must be primarily intended to enable the function of information processing and communication by electronic means .

Excludes

  • sale of computer hardware or software 4651, 4741
  • installation of mainframe & similar computers 3320
  • installation (setting-up) of personal computers 6209
  • installation of software, computer disaster recovery 6209
  • { no overlap envisaged with engineering activities & related technical consultancy 7112 }

6209

Other information technology & computer service activities

This class includes other information technology & computer related activities not elsewhere classified, such as:

  • computer disaster recovery services
  • installation (setting-up) of personal computers
  • software installation services

Excludes

  • installation of mainframe & similar computers 3320
  • computer programming 6201
  • computer consultancy 6202
  • computer facilities management 6203
  • data processing & hosting 6311
  • { no overlap envisaged with engineering activities & related technical consultancy 7112 }

742

Photographic activities

7420

Photographic activities

  • commercial and consumer photograph production:
    • photography for potraits, passports, schools, weddings etc., for commercials, publishers, fashion, real estate or tourism purposes
    • videotaping of events: weddings, meetings etc.
    • {~~ aerial photography~~ reclassified to 7112 proposal }
  • film processing:
    • developing, printing and enlarging from client-taken negatives or cine-films; film developing and photo printing laboratories; - microfilming of documents
    • one-hour photo shops (not part of camera stores); mounting of slides; copying and restoring or transparency retouching in connection with photographs
  • activities of photojournalists

Excludes

  • processing motion picture film related to the motion picture and television industries 5912
  • operation of coin-operated (self-service) photo machines 9609
  • cartographic and spatial information activities { "including manual and automated (drone ) surveying" **proposal **} 7112

C. Activities that are not currently considered as Type A (including consulting engineering activities) are not excluded (Type B)

63

Information service activities

The activities of web search portals, data processing and hosting activities, as well as other activities that primarily supply information.

Note: the products of a candidate ICT services industry must be primarily intended to enable the function of information processing and communication by electronic means .

Parts of NACE 63 referring to computer-related economic activities are generally considered to be core knowledge-intensive business services (KIBS) activities. So some consulting engineering activities may be classified under NACE 63.

  • 631 Data processing, hosting and related activities; web portals
    Provision of infrastructure for hosting, data processing services and related activities; provision of search facilities and other Internet portals.
    • 6311 Data processing, hosting and related activities
    • 6312 Web portals
  • 639 Other information service activities
    News agencies and all other remaining information service activities. Excludes activities of libraries and archives 9101.
    • 6391 News agency activities
    • 6399 Other information service activities n.e.c.
      • computer-based telephone information services
      • information search services on a contract or fee basis
      • news clipping services, press clipping services, etc.
        ** Excludes**
      • activities of call centres 8220
      • { "infrastructure data reporting services" classified to 7112 exclusion proposal }

82

Defence activities

As for physics-related activities , there are activities within NACE 82 that involve 7112.

** Excludes**
- { "engineering design" classified to 7112 exclusion proposal }

D. New exclusions in existing categories to ensure that new 7112 activities are not misclassified elsewhere

All 42 Civil engineering classes

  • { "building information modelling implementation and operation" 7111 7112 exclusion proposal }

8110 Combined facilities support activities

  • { "building information modelling implementation and operation" 7111 7112 exclusion proposal }

8130 Landscape service activities

  • { "building information modelling implementation and operation" 7111 7112 exclusion proposal }

Appendix 1 - Data

For the 28 European countries considered for the 2019 update to the FIDIC-EFCA Survey, engineering activities (NACE 7112) made up 83% of the use of consulting engineering services, with the remainder (13%) comprising activities other than NACE 7112 namely 0910, 7219, 7410, 7490, and 8130 (so-called "other" activities). Fig. 1 shows that these percentages have remained fairly constant during the period 2010-6 (other activities increased by only 1% per annum over the period, with a coresponding decrease of NACE 7112 activities).

Share Of Use 300
Fig. 1: the use of consulting engineering services. The use (log scale) of NACE 7112 and of other activities making up consulting engineering activities taken from the 2019 FIDIC-EFCA Survey update for 28 European countries.

Rate Of Change 300
Fig. 2: the change in the year-on-year growth rate of the various activites making up consulting engineering services for the 28 European countries. The growth rates for design and consulting activities assigned to NACE 7410 and 7490 and for R&D assigned to NACE 7219 are seen to be accelerating.

However, Fig. 2 giving the rate of change of the year-on-year increase of the use of consulting engineering activities shows that the growth of the research and development (NACE 7219) and of specialised design and consulting (NACE 7401 and NACE 7490) components of other activities are accelerating.

This strong growth of other activities, albeit from a relatively low level, indicates that the consulting engineering industry's future growth will arise from activities that are currently classified outside NACE 7112 (engineering activities).

Share Of Use 300
Fig. 3: the demand for consulting engineering services in 28 European countries generated by investment in construction assets and in plant and intellecual property products (essentialy industrial assets) taken from 2019 FIDIC-EFCA Survey update.

Percent Gfcg Cons Non Cons 300
Fig. 4: the data of Fig. 3 expressed as a percentage of total investment (GFCF - Gross Fixed Capital Formation).

Regarding constrction and non-construction related activities, Fig. 3 given the demand taken from the 2019 FIDIC-EFCA Survey update for consulting engineering services generated by investment in constructed assets (buildings and infrastructure, both new build and renovation) and by investment in plant and intellectural property products (mainly research and development). In 2019, non-construction demand is forecast to represent 23% of total demand (Fig. 3). Moreover, expressed as a percentage of total investment, non-construction demand is less volatile and decreasing less rapidly that construction demand (Fig. 4).