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Good-Bye, SIC  -  Hello, NAICS



The North American Industry Classification System (NAICS)
of the United States, Canada, and Mexico

Featured topics are:

  What is NAICS?
  Why replace the SIC system?
  How is NAICS better than SIC?
  How can data series be adjusted from SIC to NAICS?
  How is NAICS structured?
  Is there a source for more information about NAICS?


What is NAICS?

A new classification system has arrived for manufacturing establishments, and the Energy Information Administration (EIA) has incorporated this new system into its 1998 Manufacturing Energy Consumption Survey (MECS), with data tabulation planned by means of the new codes.

NAICS (pronounced "nakes") is the new North American Industry Classification System. It replaces the Standard Industrial Classification (SIC) system used to categorize businesses by type of activity in which they are engaged.

This new structure was developed jointly by the United States, Canada, and Mexico to provide consistent, comparable information on an industry-by-industry basis for all three economies. Each country will use the same detailed definitions to collect, summarize, and publish statistics about its domestic industries.

Classifications will be regularly updated to reflect the economic structure of the three countries. NAICS will group together activities that use the same processes in the production of goods or services. For example, publishers of software are included in Software Publishers (NAICS code 511210), while those establishments that only reproduce software are included in Software Reproducing (NAICS code 334611) in the manufacturing sector.

The U.S. manufacturing sector will now be classified by NAICS codes 31-33. The old SIC codes for manufacturing were 20-39. Industries are now identified by a 6-digit NAICS code, in contrast to the 4-digit SIC code. The longer code accommodates the larger number of sectors and allows greater flexibility in designating subsectors.

The correspondence of NAICS codes to SIC codes, and vice versa, may be found under Manufacturing at:

http://www.census.gov/epcd/www/naicstab.htm

Why replace the SIC system?

The SIC was based on concepts developed when manufacturing, and not services, dominated the American economy. A number of service activities were not separately identified, which led to the obsolescence of the SIC system.

Furthermore, the North American Free Trade Agreement (NAFTA), effective January 1, 1994, facilitates the international flow of goods, services, and capital. Hence, country-to-country comparability of statistical information is most important, but the SIC system could not accommodate such scrutiny.

How is NAICS better than SIC?

• NAICS classifies into the same group those establishments that use similar production processes;
  
  
• NAICS recognizes new, emerging, and advanced technology industries;
  
  
• NAICS acknowledges the information age in which Americans live and work;
  
  
• NAICS considers over 150 new service industries;
  
  
• NAICS provides for comparability of data with other NAFTA trading partners;
  
  
• NAICS is based on a production-oriented conceptual framework;
  
  
• Key improvements made by NAICS include:
  
  
• Reorganizing "Services" to better reflect today's economy, adding sectors for Professional/Scientific/Technical Services and Health Care/Social Assistance;
  
  
• Creating an Information sector, including software publishers, telecommunications resellers, satellite telecommunications, paging, and cellular telecommunications;
  
  
• Establishing a manufacturing subsector for Computer and Electronic Products, including manufacturing of printed circuit assembly, software reproducing, and compact disc reproducing;
  
  
• Combining restaurants and accommodations to form a new sector, including full-service and limited-service restaurants, casino hotels, and bed-and-breakfast inns;
  
  
• Restructuring the finance, real estate, and rental industries, adding credit card issuing, sales financing, general rental centers, and home health equipment rental;
  
  
• Redefining wholesale and retail trade.
  

How can data series be adjusted from SIC to NAICS?

Regrettably, the manufacturing sector will lose some of its historical comparability due to this one-time break in time-series continuity. However, for the 1998 Manufacturing Energy Consumption Survey (MECS), the Bureau of the Census has collected the information necessary to classify establishments on both an NAICS and an SIC basis. Thus, the same 1998 data can be shown on both the old and the new basis in bridge tables that allow comparisons between the two systems. As a result, MECS data will be produced for the last time on a two-digit SIC basis for 1998 at the national level only.

The following data series will have bridge tables containing 1998 MECS data; that is to say, EIA plans to produce the following data tables on both an NAICS and an SIC basis:

• First use of energy;
  
  
• Energy for nonfuel purposes, also called feedstocks;
  
  
• Inputs of energy, also called fuel consumption;
  
  
• Offsite-produced energy;
  
  
• Byproduct energy.
  

How is NAICS structured?

Is there a source for more information about NAICS?

The official U.S. NAICS Internet site is:

http://www.census.gov/epcd/www/naics.html

Additional NAICS information may be found at:

http://gulib.lausun.georgetown.edu/swr/business/naicslin.htm

URL for this page: www.eia.doe.gov/emeu/mecs/mecs98/naics/naics8.html

Return to home page for Manufacturing Energy Consumption Survey.

File Last Modified: 02/10/2000

Contact:

robert.adler@eia.doe.gov

Robert Adler

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