SIC

A system of four-digit codes established by the United States in 1937 to classify industries by their business activities. While it was the primary standard for decades, it was officially replaced by the NAICS in 1997 for most federal statistical purposes.

Despite being technically retired, SIC codes remain widely used today by the Securities and Exchange Commission (SEC), various marketing databases, and insurance companies.

SIC Structure & Hierarchy

The SIC system is organized into a four-digit hierarchy that moves from broad economic sectors to specific business types.

• Division: Letter-based categories (e.g., Division D: Manufacturing).
• Major Group: The first two digits (e.g., 20 – Food and Kindred Products).
• Industry Group: The third digit (e.g., 204 – Grain Mill Products).
• Industry Code: The fourth digit (e.g., 2043 – Cereal Breakfast Food).

SIC Characteristics

• Product-Oriented: SIC codes focus primarily on 1, rather than on the processes used to create it.
• Legacy Usage: Many private-sector organizations and legacy software systems still rely on SIC because of its long history in economic data.
• Simplicity: With only four digits, the system is less granular than NAICS, which some users find easier to navigate for broad market segmentation.

Why Is SIC Still Around?

Even though the government moved on to NAICS nearly 30 years ago, SIC persists for a few key reasons:

1. SEC Filings: Publicly traded companies are still assigned SIC codes by the SEC for their financial reports (EDGAR system).
2. Historical Analysis: Researchers comparing economic data from the early 20th century often stick with SIC to maintain an “apples-to-apples” comparison.
3. Targeted Marketing: Many commercial mailing lists are still indexed by SIC codes because the categories are familiar to sales professionals.

SIC vs. NAICS

Quick Tip: If you are applying for a government contract or a Small Business Administration (SBA) loan, you will almost certainly need your NAICS code, not your SIC code.