What is an SIC code or NAICS code?: Overview of SIC and NAICS

Definition of SIC CODES authored by Gary Klein

Standard Industrial Classification Codes (SIC Codes) and North American Industry Classification System (NAISC Codes) are numerical codes designed by the U.S. Government in order to create uniform descriptions of business establishments.

• A complete SIC code has 4 numerical digits, while a complete NAICS code has 6 numerical digits.
• SIC codes were first rolled out in 1937 within the United States, leading to similar industrial classificiations being adopted over the years in other countries.  There have been several refinements of the US SIC Code system over the years to create new codes to better reflect emerging industries, changes of technology, and trends in industrial proceures & different uses of manpower.  The United States officially ceased using SIC codes when NAICS codes were introduced.
• NAICS were developed in the 1990s as a joint project of several countries, to supplant SIC codes, to facilitate common statistical gathering among nations that signed multinational trade agreements, such as NAFTA.  NAICS codes are officially updated every five years, in those years ending in 2 or 7.
• Although SIC codes were officially abandoned in 1997, as NAICS was brought online, many people and resources still refer to any industrial coding system as "SIC" even when they are actually using NAICS.

NAICS and SIC codes can be used to bring together information about companies that produce similar products or services. For instance, if you grow oranges on your farm, your neighbor grows lemon trees, and someone else cultivates limes, all of these activities are described by SIC Code #0174, "establishments primarily engaged in the production of citrus fruits."

NAICS and SIC Codes are arranged in a very structured, hierarchical manner. 

• The first digit on the far left designates a major Economic Division, such as 0XXX is "Agriculture".
• The second digit designates an Economic Major Group within the context of the first digit, so that 01XX becomes "Crop Production".
• The third digit designates an Industry Group, such as 017X = "Grains or Fruits."
• The fourth digit fine tunes the hierarchical structure into a specific Industry.

NAICS and SIC codes are widely used throughout the large number of Economics Censuses that have been produced for decades by the U.S. Census Bureau, and by other economic analysis units of the Federal government.

Unfortunately, there is not an automatic nor consistant method to "translate" a 4 digit SIC code into the newer 6 digit NAICS coding system.

With more digits behind each NAICS code, the newer system allows for more fine tuning of an industry its components, and sub-components.  The basic principal of bringing things together under a single SIC or NAICS code is an analysis of the industrial process that takes place at each particular business establishment, as a product moves from a raw material stage, into a final product that is purchased for consumption or use..

• NAICS #1113XX = Fruit and Tree Nut Farming
• NAICS #11131X = Citrus Groves (only Oranges)
• NACIS #11132X = Citrus Groves (excluding Oranges)
• NAICS #11133X = Noncitrus Tree Fruit and Tree Nut Farming

Whenever you see the number 9, you should be aware that you are veery into a fuzzy area which has put several different odd things into one cluster. 

When the right most digits of a NAICS code ends in 99, you are dealing with a lot of miscellaneous things which are officially described as "not elsewhere classified".

Each of the versions of NAICS since 2012 is fully searchable, both by words and by code numbers and are all available from the same website =  https://www.census.gov/naics/?input=2012&year=2022

Here is a quick guide to the major sectors of NAICS Code Numbers: