Industry Research

NAICS North American Industry Classification System

  • NAICS is pronounced Nakes.
  • 6-digit hierarchical coding system for 20 industry sectors. 
  • Developed in 1997 by the Office of Management and Budget (OMB) to replace SIC as the standard for Federal statistical agencies in classifying business establishments for the collection, tabulation, presentation, and analysis of statistical data describing the U.S. economy.
  • Frequently used by other agencies and organizations for various administrative, regulatory, contracting, procurement, taxation, and other non-statistical purposes.
  • Adopted by the U.S., Canada and Mexico to provide comparability in business statistics.
  • Based on similar processes (inputs) for production activities, meaning that it groups establishments into industries according to  similarity  in the processes used to produce goods or services.  
  • Compatible with the United Nations International Standard Industrial Classification (ISIC).
  • Updated every five years prior to the Economic Census (1997, 2002, 2007, 2012).

SIC Standard Industrial Classification System

  • 4-digit hierarchical coding system for 10 divisions.
  • SIC classifies establishments by their primary activity focusing on similar products and services (outputs).
  • Established in 1937, it was replaced by NAICS in 1997. 
  • Last updated in 1987, SIC is still used by some government agencies and in many business databases. 
  • SIC is currently hosted on the OSHA website.

Compare NAICS & SIC

The NAICS taxonomy is based on a production-oriented, or supply-based, conceptual framework instead of an output-based framework of SIC. This means that producing units that use identical or similar production processes are grouped together in NAICS. 

While many NAICS industries directly compare with SIC industries, a number of SIC industries were split or combined to form a new NAICS industry, as illustrated in this table:

Other Industry Classifications

Financial Market Industry Classifications

The market-oriented approach to classifying companies is based on the way the company earns revenue and how customers use the company"s products. These classifications are used in financial analysis and investment research.

NOTE:  Be aware of terminology differences, for example, industry and sector have opposite meanings in NAICS and ICB.

The Fidelity Learning Center offers insights on understanding sectors, industries, and how to classify companies: