North American Industry Classification System
Since 1997, the Standard Industrial Classification (SIC) was replaced by the North American Industry Classification System (NAICS). This six digit code is a major revision that not only provides for newer industries, but also reorganizes the categories on a production/process oriented basis. This new, uniformed, industry-wide classification system has been designed as the index for statistical reporting of all economic activities of the US, Canada, and Mexico.
NAICS uses a six digit hierarchical coding system to classify all economic activity into twenty industry sectors. This six digit hierarchical structure allows greater coding flexibility than the four digit structure of the SIC. NAICS allows for the identification of 1,170 industries compared to the 1,004 found in the SIC system.
Multi - National Corporations using NAICS Coding
NAICS can be implemented in any business to classify customers and enable users to gain a clear perspective on target markets. This is one of the most common uses of the NAICS and SIC in the general market. Whether it's statistical analysis, market research, or sales leads NAICS and SIC codes provide a valuable tool to get the information needed to succeed. Benefits of NAICS Coding- Relevance - NAICS identifies hundreds of new, emerging, and advanced technology industries; and reorganizes them into more meaningful sectors especially in the service-producing segments of the economy
- International Comparability - NAICS was developed in cooperation with Statistics Canada and Mexico's INEGI. NAICS provides for comparable statistics among the three NAFTA trading partners
- Consistency - NAICS defined industries according to a consistent principle, i.e. businesses that use similar production processes are grouped together
- Adaptability - NAICS will be reviewed every 5 years, so classifications and information keep up with our changing economy
For more information regarding NAICS, please refer to the following sites:
http://www.census.gov/epcd/www/naics.html
http://www.naics.com/
