What Is An SIC Code?
Standard Industrial Classification (abbreviated SIC) is a system for classifying industries by a four-digit code that corresponds to a defined industry type.
Established in the United States in 1937, it is used by government agencies to classify industry areas. At the time of its creation, governmental agencies were beginning to collect industrial data for a variety of statistics. However, agencies defined industrial categories in different ways, making data comparison impossible. The SIC code system established standard categories for industry, which could be used by all government agencies.
SIC codes are captured on U.S. Census Bureau reports, tax returns and government reports. The SIC code can be used to find specific business types and retrieve industry statistics.
The SIC codes can be grouped into progressively broader industry classifications: industry group, major group and division. The first 3 digits of the SIC code indicate the industry group, and the first 2 digits indicate the major group. Each division encompasses a range of SIC codes. From 0100 till 0999 is the division Agriculture, Forestry and Fishing, from 1000 till 1999 is the division Mining, from 2000 till 3999 is the division Manufacturing, from 4000 till 4999 is the division Transportation, Communications, Electric, Gas and Sanitary service, from 5000 till 5199 is the division Wholesale Trade, from 5200 till 5999 is the division Retail Trade, from 6000 till 6799 is the division Finance, Insurance and Real Estate, from 7000 till 8999 is the division Services and from 9100 till 9729 is the division Public Administration. The codes that start with 99 are Nonclassifiable.
To look at a particular example of the hierarchy, SIC code 2024 (ice cream and frozen desserts) belongs to industry group 202 (dairy products), which is part of major group 20 (food and kindred products), which belongs to the division of manufacturing.
Although the SIC code system is an accepted standard for industry classification, no central agency assigns codes to individual businesses. Each business chooses its own SIC code based on its interpretation. Companies with the same business type may choose different codes. In addition, different sources may register different codes for the same company.
In the United States the SIC code is being supplanted by the six-digit North American Industry Classification System (NAICS code) which was released in 1997; however certain government departments and agencies, such as the U.S. Securities and Exchange Commission (SEC), still use the SIC codes.