The industry classification system used during Census 2000 was developed for the census and consists of 265 categories for employed people, classified into 14 major industry groups. From 1940 through 1990, the industrial classification has been based on the Standard Industrial Classification (SIC) Manual . The Census 2000 classification was developed from the 1997 North American Industry Classification System (NAICS) published by the Office of Management and Budget, Executive Office of the President. NAICS is an industry description system that groups establishments into industries based on the activities in which they are primarily engaged.
The NAICS differs from most industry classifications because it is a supply-based, or production-oriented economic concept. Census data, which were collected from households, differ in detail and nature from those obtained from establishment surveys. Therefore, the census classification system, while defined in NAICS terms, cannot reflect the full detail in all categories. NAICS shows a more detailed hierarchical structure than that used for Census 2000. The expansion from 11 divisions in the SIC to 20 sectors in the NAICS provides groupings that are meaningful and useful for economic analysis. Various statistical programs that previously sampled or published at the SIC levels face problems with the coverage for 20 sectors instead of 11 divisions. These programs requested an alternative aggregation structure for production purposes which was approved and issued by the Office of Management and Budget on May 15, 2001, in the clarification Memorandum No. 2, "NAICS Alternate Aggregation Structure for Use by U.S. Statistical Agencies." Several census data products will use the alternative aggregation, while others, such as Summary File 3 and Summary File 4, will use more detail.
