The North American Industry Classification System (NAICS) Ready Or Not, Here It Comes!

Jonathan Cole

For over half a century the Standard Industrial Classification System (SIC) system has been used to classify establishments by type of economic activity and to facilitate federal and state agencies in the aggragation of employment and wage statistics. The SIC system, originated at a time when the nation's economy was almost entirely driven by manufacturing, has not kept pace with the recent rapid changes in the nature of how we live and work. To obtain economic comparability with our NAFT trading partners and to update our classification system, the Office of Management & Budget has reformed the classification system introducing the new North American Industry Classification system (NAICS). This presentation will compare the two systems, explain the changes which will result and the chart the pitfalls for users of economic data.