Implementing the North American Industry Classification System at BLS

Recent years have brought many changes in the U.S. economy. The rapid development of telecommunications and the Internet are only two examples of an incredible continuing evolution and progressively changing business environment. Correspondingly, economists and statisticians are improving their tools for measuring the economy. One basic tool is the classification of businesses by industry. Since the 1930s, government statistical programs have published industry data based on the Standard Industrial Classification (SIC) system. Now, these government programs will provide industry statistics based on the North American Industry Classification System (NAICS).1 The SIC system, originally designed in the 1930s, has been revised and updated periodically to reflect changes in the U.S. economy. The last revision was in 1987 when a number of new industries such as computer and software stores, video tape rental stores, and plastic bottle manufacturers were added.2 However, the SIC system still focuses on the manufacturing sector of the economy, and provides insufficient detail for the now dominant service sector. Newly developed industries in information services, health care delivery, and even high-tech manufacturing cannot be adequately studied under the SIC system because they are not separately identified at the industry level. Thus, a new system has been developed that captures the dynamism of the 21st century economy and changes as industry activity develops. The Office of Management and Budget James A. Walker and John B. Murphy