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Learn More About SIC Codes:
What are SIC Codes and why do they exist?
What is a Standard Industrial Classification (SIC) code? It is a
four-digit code to determine and classify a specific industry.
The SIC code system of industrial classification was created
in the 1930’s by the government, to identify a type of
business establishment by using a four-digit numerical code. The
major industry determines the first two digits of the code. The
last two digits narrow the identification down to a specific group
within the larger industry.
For example: The SIC code, “2091” is for “Canned
and Cured Fish and Seafoods.” The first two digits
“20” will indicate the major group of “Food and
Kindred Products.” The third digit “9”
breaks the industry down further into “Miscellaneous Food
Preparations and Kindred Products.” The final digit
“1” indicates the most specific part of the
classification: “Canned and Cured Fish and Seafoods.”
If the last digit had been “8” instead of
“1” then the specific industry would have been
“Macaroni,
Spaghetti, Vermicelli, and Noodles.”
Here is another example of a SIC code:
“1041” is the industry code for “Gold
Ores.” Breaking this code down, we see that the first two
digits “10” indicate the major industry of “Metal
Mining.” The third digit “4” means “Gold
and Silver Ores.” Because the code ends with a
“1,” we know that this code is specific to “Gold
Ores.” Had the code ended with “4,” then it would
be “Silver Ore.”
All economic activities are identified using the Standard
Industrial Classification system. From agriculture to zoos
and recreation, each industry fits within the code parameters into
its own specific classification.
What is their Purpose?
The purpose of creating the Standard Industrial Classification coding system was not only to identify an industry but also to collect statistical data in a uniform way between government agencies and private conglomerates. This made collecting, analyzing, and presenting data and statistics much more timely and accurate.
The use of SIC codes is diminishing due to the implementation of the North American Industry Classification System (NAICS). The NAICS was release back in 1997. It is a six-digit coding system in which the first five digits are standardized in all of North America. The NAICS was unveiled by the United State’s Commerce Department back in 1999 when the Census Bureau released the 1997 Economic Census.
The United State’s Department of Labor’s Occupational Safety and Health Administration (OSHA) have an internet site that provides the 1987 version of the SIC Manual. The website allows the user to search SIC codes by description and it provides information about each specific industry. It also enables the user to examine the structure of the SIC coding system. Please visit the site www.OSHA.gov for more information.
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