Issue No. 5, Copyright (c) NAICS Association, 1998

For additional information, visit NAICS Association Web Site

http://www.naics.com

For product information jump directly to our secure on-line storefront:

http://store.yahoo.com/naics

Just when you thought you finally had a system for classifying your business customers or perhaps a great sales lead system in place, the U.S. Government replaces the Standard Industrial Classification (SIC) system with some new version called NAICS.

Why the change from SIC to NAICS?

There are two main reasons behind this major change in business classification systems.

1. Better organization and forward thinking for new industries

2. The North American Free Trade Agreement (NAFDA)

Standard Industrial Classification

The SIC was originally developed in the 1930's to classify businesses by the type of activity in which they are primarily engaged and to provide a standard for comparing those businesses. Over the years, it was revised periodically to reflect changing industry and was last updated in 1987. SIC has long been criticized and in 1992 the U.S. Government looked at starting a new classification system.

North American Industry Classification System

On April 9, 1997, the Office of Management and Budget (OMB) announced the adoption of a new industry classification replacing the SIC, a system used to classify most of the data we have about industries or kinds of business in our economy. Further, the system was redefined jointly with Canada and Mexico so that comparable statistics could be obtained for the three NAFTA trading partners.

NAICS groups the economy into 20 broad sectors, up from the 10 divisions of the SIC system.

The following are the 20 broad sectors:

The New Numbering System

NAICS industries are identified by a 6-digit code, in contrast to the 4-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. 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, 6-digit U.S. codes may differ from counterparts in Canada or Mexico, but at the 5-digit level they are standardized.

XX      Industry Sector (the 20 sectors from above)

XXX     Industry Subsector

XXXX    Industry Group

XXXXX   Industry

XXXXXX  U.S., Canadian, or Mexican National specific Industry

BUT WHAT DOES ALL THIS MEAN TO ME?

How do I change from SIC to NAICS?

One option would be to get the new NAICS Manual.

Now, you can either wait for the Government to print their manual (whenever that will happen) or you can get our 2nd Edition NAICS Manual shipping since January 1998. This new NAICS Manual includes:

Table 1 - NAICS to SIC Reference

Table 2 - SIC to NAICS Reference

Table 3 - NAICS Alphabetically with NAICS and SIC codes

Table 4 - SIC Listing

Table 3 is a valuable resource that provides for a direct reference from all the new NAICS industry sectors to their SIC counterparts. This hard bound book is priced at $38 plus $6 shipping and handling.

You can order it on-line at:

hhttp://store.yahoo.com/naics/ntisnaicman.html

or you can also order it by phone from the NAICS Association at:

Phone / Fax: (435) 755-6003

You can go beyond the basic book format with an electronic version on CD-ROM (or 3.5 inch diskettes). This NAICS CD-ROM includes:

• Table 1 in comma delimited and PDF formats
• Table 2 in comma delimited and PDF formats
• Complete NAICS Listing in comma delimited format
• Table 4 in searchable InfoBase format
• Adobe Acrobat Reader (for PDF files)

The comma delimited format allows you to import this data directly into your own database or conversion application. The PDF format allow for easy reading, printing, and searching.

This CD-ROM (or 3.5 inch diskettes) is priced at $65 plus $5 shipping and handling. You can order it on-line at:

http://store.yahoo.com/naics/naicscdrom.html

or you can also order it by phone from the NAICS Association at:

Phone / Fax: (435) 755-6003

NEXT MONTH

Okay, now that we've covered the basics, next month we will continue with some industry specifics and how you can take advantage of this new classification system.

Until then, let us know what you think of our newsletter, ask your questions, or tell us how your are using SIC or NAICS.

Simply reply to this email or contact us at:

info@naics.com

Good Luck!