NAICS and SIC Codes

What is NAICS?

The North American Industry Classification System (NAICS) is an economic classification system introduced in 1997 to replace the 1987 SIC system. NAICS codes are 6 digit numerical codes assigned by the U.S. government to business establishments to identify the primary business of the establishment. The classification was developed to facilitate the collection, presentation, and analysis of data; and to promote uniformity and comparability in the presentation of statistical data collected by various agencies of the federal government, state agencies, and private organizations. This new system was developed jointly by the U.S., Canada, and Mexico, to make international comparisons easier. Starting with federal data collected for 1997 in the United States and Canada and 1998 for Mexico, the new NAICS codes apply. The 1997 Economic Census was the first to use the new system. The Official Notice announcing the implementation of the NAICS provides an excellent explanation of the new system and its origins. Information about this new system is available at several sites:

Reading NAICS Codes

The NAICS is arranged in a hierarchical structure. The first two digits identify a major Economic Sector [formerly Division], the third digit designates an Economic Subsector [formerly Major Group], the fourth digit designates an Industry Group, and the fifth digit designates the NAICS Industry. For example, the NAICS number for potato chips is:

      31    Manufacturing

      311     Food Manufacturing

      3119      Other Food Manufacturing

      31191       Snack Food Manufacturing

      311919        Other Snack Food Manufacturing

The internationally agreed upon NAICS system determines only the first five digits of the code. Use of a sixth digit permits the individual countries to specify subdivisions suited to the country. Thus, 5-digit codes are standardized across the three countries, but at the 6-digit level the U.S. codes may differ from those in Canada or Mexico.

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What are SIC codes?

Standard Industrial Classification (SIC) codes are four digit numerical codes assigned by the U.S. government to business establishments to identify the primary business of the establishment. The classification was developed to facilitate the collection, presentation, and analysis of data; and to promote uniformity and comparability in the presentation of statistical data collected by various agencies of the federal government, state agencies, and private organizations. The classification covers all economic activities: agriculture, forestry, fishing, hunting, and trapping; mining; construction; manufacturing; transportation; communications, electric, gas, and sanitary services; wholesale trade; retail trade; finance, insurance, and real estate; personal, business, professional, repair, recreation, and other services; and public administration. In 1997, the SIC system was replaced by the NAICS system, which provides uniform classifications for the United States, Canada, and Mexico. NAICS numbers may vary considerably from SIC codes.

Reading SIC Codes

The first two digits of the code identify the major industry group, the third digit identifies the industry group, and the fourth digit identifies the industry. For example, the SIC code for potato chips is:

      20    Food and Kindred Products

      209     Miscellaneous Food Preparations and Kindred Products

      2096      Potato Chips, Corn Chips, and Similar Snacks

        
To make it easier to identify specific industries or even particular products, some sources, such as the Predicasts F&S Index, expand the code to as many as seven digits. For example:

      36    Electronic & Other Electrical Equipment & Components, Except Computer Equipment

      367     Elelctronic Components and Accessories

      3674      Semiconductors and Related Devices

      3674125     Random Access Memory Circuits [Predicasts F&S Index code]

Note that the digit "9" is used in the third- or fourth-digit position of the classification code to designate miscellaneous industries not elsewhere classified. These miscellaneous classifications are not comprised of homogeneous primary activity groups. They are grouped together and treated as a separate industry in order to retain the homogeneity of the other industries in the group.

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Where are NAICS and SIC codes listed?

To identify NAICS codes, consult:

To find the NAICS code for a firm, use company resources, such as:

  • Standard & Poor's Register of Corporations, Directors and Executives (Desk Reference HG 4057 .A401)
    Volume two contains both an alphabetical and numerical listing of the major industrial sectors and an index of all companies listed in the Register by NAICS number. Many companies have multiple listings, depending on the various lines of business in which the company is engaged.

To identify the SIC code for an industry or product, consult:

  • Standard Industrial Classification Search from OSHA, which permits online searching by keyword or number.

  • Standard Industrial Classification Manual (Floor 2 Information Desk PREX 2.6/2:IN 27/987)
    Published by the Office of Management and Budget, the manual is the official guide to the SIC codes assigned to establishments by the federal government. The body of the manual is arranged by SIC code. A detailed alphabetic index is provided, as is a numerical listing of short titles for the industries.

  • the alphabetic listing at the front of volume one of the Predicasts F&S Index for any year - the first four digits of the classification number are the SIC code for that industry.

To find the SIC code for a firm, use company resources, such as:

  • Dun & Bradstreet's Million Dollar Directory (Reference HC 102 .D8)
    Its Industry Cross-Reference section lists companies under the four digit SIC codes, which are arranged in numerical order. Many companies have multiple listings, depending on the various lines of business in which the company is engaged.

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How are NAICS and SIC Codes used?

You can use the NAICS or SIC code to find information about the industry in many sources, including:
  • Economic Census
    Beginning with the 1997 census, NAICS is used; earlier censuses use SIC codes.

  • various business ratio sources

  • Predicasts F&S Index
    Comprised of three indexes to business periodicals, covering the United States (Reference Z 7165 .U5 F2304), Europe (Reference Z 7165 .E8 F27), and International (Reference Z7164 .C81 F1401). Each index contains information from hundreds of financial publications, business oriented newspapers, trade magazines, and special reports. Each index has two sections: company and industry/product. The company section is arranged alphabetically by company name. The industry/product section is arranged by major industry groups using a modified SIC number system. An alphabetical guide to SIC numbers appears at the front of the volume.

International Classification Systems

Several product and activity classification systems are in use internationally. Principal among them are:

Other helpful sources include:

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Last Modified: 2009-10-29 10:43:25