The SIC Are Dying: New Federal Industry Code on the Way

By Quint, Barbara | Searcher, September 1996 | Go to article overview
Save to active project

The SIC Are Dying: New Federal Industry Code on the Way


Quint, Barbara, Searcher


Established in the 1930s, the Standard Industrial Classification (SIC) codes have long formed a framework structuring most federal and many private collections of industry statistics. So prevalent have the familiar SIC codes become, that many textual business databases use them to sort non-statistical articles and reports on industries and products.

Information Access Company uses the SICs throughout their bibliographic and full-text databases, as, of course, does Dun and Bradstreet in their business directory and financial files. Even the Hoppenstedt Directory of German Companies uses the U.S. SIC codes.

But the SICs are on the way out. Several years ago, federal statisticians from the Bureau of the Census and Bureau of Economic Analysis in the U.S. Department of Commerce and the Bureau of Labor Statistics in the Department of Labor formed the Economic Classification Policy Committee (ECPC) under the Office of Management and Budget (OMB). The ECPC has created a new industry classification hierarchy called the North American Industry Classification System (NAICS -- pronounced "rakes" as in asps). With the launch of the 1997 Economic Censuses by the Bureau of the Census in December 1997, the NAICS codes will replace the SICs. The Census will start the transition, maintaining double data filed under the old and new codes for the 1997 statistics, but all government agencies and most private sector statistical collectors and disseminators are expected to follow the new codes sooner than later.

The new NAICS code will apply to all industries in North America, as the ECPC team has worked jointly with Statistics Canada and Instituto Nacional de Estadistica, Geografia e Informatica (INEGI) to establish a common industry code scheme for the United States, Canada, and Mexico. According to Jack Triplett, chairman of the ECPC, the project to build a new coding scheme to replace the SIC codes originally targeted only the United States, but expanded into a three-country project with the addition of Canada and Mexico.

The expansion into a multi-national code slowed down the process somewhat, according to Triplett. At one time this year, Triplett had different teams rotating in and out of Mexico for weeks on end. But they expect the three-country coverage to increase the code's usefulness. Shortly before the release of the "final" hierarchy for "final" public comment, several problem areas between the three countries loosened up and only a few areas remain unclarified.

The transition to the new code will begin with the 1997 Economic Censuses. The new code uses six-digits. Data collection for the Economic Censuses will actually begin in 1998. However, the Bureau of the Census will issue new forms in December 1997. The first report issued using the NAICS codes should issue in December 1998 with statistical detail at levels equivalent to the two- and three-digit SIC codes. By 2001, statistical reports using the full range of NAICS code should be out.

The Good News

"What's in it for me?" Good question, business searchers. The new NAICS code system will offer substantial advantages.

The Reality Factor: The basic conceptual framework behind the old SIC codes is posited upon an image of the U.S. economy set in 1940, as Triplett points out. It does not match the realities of today's economy. Repeated tinkering every seven years or so has kept the SIC codes moving forward, but finally the old system just failed to serve the needs of economists, planners, and statisticians.

The NAICS code will support process and production factor analysis about industries and contribute to a better understanding of factors affecting economic policies. It will also support more detailed industry operational analysis. The NAICS category encompassing restaurants, for example, will distinguish between restaurant by type of service and other distinctions. The Apparel category will differentiate between contract manufacturing and direct manufacture.

The rest of this article is only available to active members of Questia

Sign up now for a free, 1-day trial and receive full access to:

  • Questia's entire collection
  • Automatic bibliography creation
  • More helpful research tools like notes, citations, and highlights
  • Ad-free environment

Already a member? Log in now.

Notes for this article

Add a new note
If you are trying to select text to create highlights or citations, remember that you must now click or tap on the first word, and then click or tap on the last word.
Loading One moment ...
Project items
Notes
Cite this article

Cited article

Style
Citations are available only to our active members.
Sign up now to cite pages or passages in MLA, APA and Chicago citation styles.

Cited article

The SIC Are Dying: New Federal Industry Code on the Way
Settings

Settings

Typeface
Text size Smaller Larger
Search within

Search within this article

Look up

Look up a word

  • Dictionary
  • Thesaurus
Please submit a word or phrase above.
Print this page

Print this page

Why can't I print more than one page at a time?

While we understand printed pages are helpful to our users, this limitation is necessary to help protect our publishers' copyrighted material and prevent its unlawful distribution. We are sorry for any inconvenience.
Full screen

matching results for page

Cited passage

Style
Citations are available only to our active members.
Sign up now to cite pages or passages in MLA, APA and Chicago citation styles.

Cited passage

Welcome to the new Questia Reader

The Questia Reader has been updated to provide you with an even better online reading experience.  It is now 100% Responsive, which means you can read our books and articles on any sized device you wish.  All of your favorite tools like notes, highlights, and citations are still here, but the way you select text has been updated to be easier to use, especially on touchscreen devices.  Here's how:

1. Click or tap the first word you want to select.
2. Click or tap the last word you want to select.

OK, got it!

Thanks for trying Questia!

Please continue trying out our research tools, but please note, full functionality is available only to our active members.

Your work will be lost once you leave this Web page.

For full access in an ad-free environment, sign up now for a FREE, 1-day trial.

Already a member? Log in now.

Are you sure you want to delete this highlight?