What is the industry standard classification?

Businessman making thumbs up

The Standard Industrial Classification (SIC) was a classification system used in the United States between 1937 and 1997 to collect statistical information about commercial activities. It has been replaced by the North American Industry Classification System (NAICS), but some organizations continue to use SIC codes. The Securities and Exchange Commission, for example, has maintained SIC codes in its publications and discussions of economic issues, and it is not uncommon to see industry standard application codes in a variety of publications.

In the 1930s, manufacturing and industry were booming in the United States, and the government recognized that keeping statistics was extremely important in allowing the government to track economic growth and progress. It developed the Standard Industry Classification as a way to fit all companies in the United States into one category. Categorizations can be used for things like comparing different industries, looking at economic performance in different states, and identifying trends in American industry, such as the rise of women-owned businesses.

Each industry standard classification has four digits. The first two digits largely represent the main industry category, while the second two create a subtype. 0800, for example, is forestry, and some branches of the forestry industry can be identified with different two-digit codes to replace the “00”. Some examples of SIC codes include 2732 for book publishing, 3821 for laboratory apparatus, and 7800 for the film industry.

Using the Standard Industry Classification, the US Census Bureau and other agencies that maintain and track statistics can maintain accurate data on the types of businesses in the United States. Instead of having to manually sort records to look for video locations, for example, one can enter “7841” to bring up data about video rental stores in the United States.

See also  What should I consider when giving gifts at work?

NAICS, an outgrowth of the Standard Industrial Classification, covers all of North America, not just the United States. Six-digit NAICS codes divide sectors into progressively smaller classifications, just like the SIC code, and this information can be used for a variety of purposes.

Complete lists of SIC and NAICS codes are available from various government agencies, along with conversions for people who want to know what NAICS replacements for older SIC codes might be. Conversion capability can be useful when people want to compare statistics from different years or when they want to interpret published data with SIC codes from the NAICS framework.

Leave a Comment