- The Washington Times - Thursday, March 8, 2001

Manufacturers more than any other industry use electronic commerce, according to census figures released yesterday.
Companies that make such goods as paper, chemicals, machinery and electrical equipment sold more than $485 billion in shipments through private electronic ordering systems and the Internet in 1999 accounting for 12 percent of the $4 trillion manufacturing industry, the U.S. Census Bureau's first "E-Stats" report said.
On-line retail made up 0.5 percent of the $2.9 trillion in overall retail sales that year.
"We had a feeling manufacturing would dwarf retail, but it was much larger than we thought," said Thomas L. Mesenbourg, assistant director of economic programs for the Census Bureau.
The E-Stats report covered four key industries: manufacturing shipments, wholesale merchants, selected services and retail trade. While each industry used electronic commerce, those selling primarily to businesses had a higher electronic-commerce rate than the industries selling primarily to consumers.
The report concludes that one reason for the large electronic-commerce difference with manufacturers may be the industry's extensive use of EDI systems, a business-to-business on-line ordering system transmitted over private networks.
"Companies have been doing e-commerce for 20 years; they just haven't been doing it on the Internet," said Jean-Gabriel Henry, senior analyst at Jupiter Research, an Internet-research firm. "EDI use for retailers is nowhere near as extensive."
Transportation equipment companies shipped about $140 billion worth of merchandise ordered on line, the largest electronic-commerce activity in the manufacturing sector, according to the report. Two sectors wood products and petroleum and coal products reported electronic-commerce shipments of less than 5 percent.
Electronic commerce sales in wholesale made up 5.3 percent or $134 billion of the $2.5 trillion industry. Three groups wholesalers of drugs, motor vehicle parts and supplies, and professional and commercial equipment totaled $102 billion in electronic commerce sales.
Selected service industries posted about $25 billion in electronic commerce revenue, or 0.6 percent of the overall $4.3 trillion industry. Travel arrangement and reservation systems accounted for 21 percent of total selected service electronic-commerce sales.
About $15.4 billion of the $2.9 trillion retail industry can be attributed to electronic commerce, despite the attention on-line retail has received over the past several years.
Internet retailers, mail-order houses, vending-machine operators and direct-sale businesses like door-to-door sales account for about $11.8 billion or 76 percent of retail's electronic-commerce component.
The E-Stats report does not cover the entire economy, excluding such industries as construction and utilities. The four areas studied in the report already are covered by existing Census Bureau surveys, Mr. Mesenbourg said.
Electronic-commerce questions will be added to the 2002 economic census to include all industries like construction, utilities and service industries not covered annually. That means almost all 5 billion businesses in the United States will participate, Mr. Mesenbourg said.
Many companies are still in the early stages of Internet adoption with businesses just starting to buy on line and beginning to use the Internet as part of their procurement process, according to a January report by the National Association of Purchasing Management and Forrester Research Inc.

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