NAICS

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The North American Industry Classification System (NAICS) has replaced the US Standard Industrial Classification (SIC) system.

NAICS is the first-ever North American industry classification system. The system was developed by the U.S., Canada, and Mexico to provide comparable statistics across the three countries. For the first time, government and business analysts will be able to compare directly industrial production statistics collected and published in the three North American Free Trade Agreement countries. NAICS also provides for increased comparability with the International Standard Industrial Classification System (ISIC, Revision 3), developed and maintained by the United Nations.

NAICS industries are identified by a six digit code, in contrast to the four digit SIC code. The longer code accommodates the larger number of sectors and allows more flexibility in designating subsectors. It also provides for additional detail not necessarily appropriate for all three NAICS countries.

NAICS is organized in a hierarchical structure much like the existing SIC:

•	The first two digits designates a major Economic Sector (formerly Division) such as Agriculture or Manufacturing.

•	The third digit designates an Economic Subsector (formerly Major Group) Such as Crop Production or Apparel Manufacturing.

•	The fourth digit designates an Industry Group, such as Grain and Oil Seed Farming or Fiber, Yarn and Thread Mills.

•	The fifth digit designates the NAICS Industry such as Wheat Farming or Broadwoven Fabric Mills.

The international NAICS agreement fixes only the first five digits of the code. The sixth digit, where used, identifies subdivisions of NAICS industries that accommodate user needs in individual countries. Thus, six digit US codes may differ from counterparts in Canada or Mexico, but at the five digit level they are standardized.

The recognition of NAICS as the official classification system to be used by the US statistical agencies is the culmination of a multi-year review by the ECPC of economic classifications, business data users, and future information needs. The publication in early 1999 of Economic Census data based on NAICS will provide the first glimpse of data based on the new system.

For more information, please see the US Department of Labor's Bureau of Labor Statistics