SYSTEM: NAICS -V- SIC
Long term users of
these databases and forecasting models will have noted that U.S. Federal
statistical data collected on or after January 1, 1997, use the new North
American Industry Classification System (NAICS). Users should use the Bridges
between NAICS and SIC contained in the Database Specifications section to
ensure compatibility with long-range regressional data.
Industrial Classification (SIC) system has been used to classify industry
sectors in the U.S. economy since 1940. The last major revision of the SIC
was in 1987. However, the basic structure has remained substantially the
same since its introduction.
Two major criticisms
have been leveled at the current SIC: it focuses too heavily on
manufacturing, and it gives little recognition to the growing service
sector that now represents 75 percent of GDP. NAICS is based on a
production concept. Classifying an industry by production means that
establishments using similar processes and inputs to produce a good or
service are grouped together. Inputs include types of labor and skills,
capital equipment, and intermediate materials. In many cases intangible
inputs may be important, especially in the services industries.
manufacturing industries, most of the effort was spent on harmonizing the
systems of the United States, Canada, and Mexico and addressing the
statistical needs of U.S. industries. The United States will have
approximately the same number of manufacturing industries in the NAICS as
it did in the SIC. A new subsector has been created for computer and
electronic product manufacturing to reflect the growth in advanced
In addition to the
changes in the manufacturing industries, three new sectors have been
created that did not exist within the SIC system:
(1) The information
sector brings together such industries as publishing, motion picture and
video, sound recording, broadcasting, telecommunications, libraries,
on-line information services, and data processing. The concept is to group
three types of establishments: those engaged in producing and distributing
information, those that provide the means to distribute these products as
well as data or communications, and those that process data or
professional, scientific, and technical services sector includes those
establishments engaged in processes that involve significant human capital.
This sector includes legal, architectural, and engineering services, and
firms engaging in management consulting, public relations, and advertising.
These establishments use the knowledge and skills of their employees to
deliver services to the client.
(3) The health-care
and social assistance sector was developed because it is difficult to
distinguish the boundaries of health care and social assistance. These
industries range from those that provide acute (doctors/hospitals) to
minimal health care with social assistance to those providing only social
assistance, such as housing facilities for the elderly.