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 Divisions 83 Major Groups 413 Industry Groups 1,005 Industries *10,000+ industries
(See 6,7,8 digit SIC)

NAICS Categories

20 Sectors 99 Subsectors 312 Industry Groups 713 Industries 1,066 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