SIC Codes vs NAICS Codes

Background 

SIC Codes were established in 1937. The system was built with a strong foundation and was updated numerous times until 1987. The planning of NAFTA as a Free Trade economic community between the U.S.A, Mexico, and Canada led to a new approach for a classification system for the member countries. SIC codes required an update and were in need of more specific classifications. In the interest of the member countries, a new system (NAICS) was established in 1997.

The SIC system still remains the most popular industry classification system, as its use by data and marketing companies has been firmly entrenched and developed for over 40 years. Even though NAICS was established in 1992, the classification system hasn’t entirely caught on. It is similar to when the U.S.A. tried to implement the metric system. Businesses, organizations, and others have grown accustomed to the use of SIC codes and have continued to classify companies, search for companies, and target companies based on SIC codes. 



Use Today

Though the US government stopped updating SIC codes in 1987, private data organizations have continued to update the SIC system to very specific classifications, even more specific than NAICS codes.  This has continuously evolved with changing marketplaces, technological innovations, and expert analysis of trends. At the most defined levels, there are well over 10,000 SIC codes in use and continuously updated as compared to only 1,066 NAICS codes. For targeting and marketing purposes, the specificity of SIC codes far exceeds the NAICS system. 

Currently, we are seeing the most use of NAICS codes with US government contracting and statistical applications. At State and Federal levels, SIC and NAICS are both being used, but it varies by department. In the private sector, SIC codes are the most commonly used industry classification system. The SIC system is entrenched in private business databases, while the switchover to NAICS has encountered numerous difficulties. One of the biggest challenges is the 5-year gap between updates for new classifications and accounting for the new industries that emerge in that time frame (ie: e-cigarettes).  Another is the lack of specificity of the industries as compared to the 6,7,8 extensions to the SIC system.  Fortunately, SICCODE representatives are experts in both SIC and NAICS classification systems and can assist with all code marketing, targeting, selection and verification services (contact SICCODE).



Category Structure for SIC and NAICS


SIC Categories

11 Divisions83 Major Groups413 Industry Groups1,005 Industries

*10,000+ industries (See 6,7,8 digit SIC)


NAICS Categories

20 Sectors99 Subsectors312 Industry Groups713 Industries1,066 U.S. Industries




SIC Code vs NAICS Comparison

At the most specific classification, one NAICS code can be further broken down into more specific SIC Code Extended categories. In the example below, NAICS Code 541330 is in the most specific classication in the NAICS system, however it can be further classified into 40 SIC Code Extended categories - thereby providing a more refined and specific targeting system.




NAICS Code

Description


541330

Engineering Services



SIC Code Extended Categories for NAICS Code 541330






SIC Code

Description



871101

Naval Architects



871102

Acoustical Consultants



871103

Engineers-Agricultural



871105

Contractors-Engineering General



871106

Engineers



871107

Engineers-Air Cond Heating Ventilating



871108

Engineers-Acoustical



871109

Engineers-Chemical



871110

Engineers-Civil



871111

Engineers-Consulting



871112

Engineers-Construction



871115

Engineers-Electrical



871116

Engineers-Electronic



871117

Engineers-Foundation



871119

Engineers-Geotechnical



871120

Engineers-Environmental



871122

Engineers-Industrial



871124

Engineers-Land Planning



871125

Engineers-Mechanical



871126

Engineers-Marine



871127

Engineers-Management



871129

Engineers-Traffic & Transportation



871133

Engineers-Professional



871134

Engineers-Water Supply



871137

Engineers-Structural



871138

Engineers-Sanitary



871140

Engineers-Designing



871142

Vibration Measurement Service



871143

Engineers-Aeronautical



871146

Lighting Engineers



871147

Engineering



871152

Engineers-Nuclear



871156

Engineers-Research



871159

Engineers-Waste Water Treatment



871166

Engineers-Technical Service



871174

Technologists-Professional



871180

Engineers-Computer



871186

Engineers-Technology



871198

Engineering & Architectural Services



874809

Roofing Service Consultants




Differences Between SIC and NAICS Codes

SIC Codes and NAICS: Have entirely different numbering systems


  • NAICS: Developed in conjunction with the U.S., Canadian, and Mexican governments
  • SIC Codes: Developed solely by the U.S. government


  • NAICS: Groups together establishments that use the same or similar processes to produce goods or services
  • SIC Codes: Groups together establishments based on either demand or production


  • NAICS: Actively used for government statistical purposes
  • SIC Codes: Actively used for business targeting in the private sector