Industry Classification Schemes
Governments keep track of economic activity by corporations in order to measure economic growth and foreign trade, and to levy appropriate taxes and tariffs. Typically, corporations in the same (or similiar) line of business are grouped together so that meaningful comparisons may be made over time.
U.S. and North American Classification Schemes
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SIC - Standard Industrial Classification. The SIC Manual (ALEX DOCREF; CAMDN, IMLR REF HF 1042 .S72; DANA, KLMR Reference Desk) was last revised in 1987; it provides the government-assigned (four-digit) numerical codes for identifying industries, businesses, and products. With the adoption of the North American Free Trade Agreement, the SIC has now been replaced by the more detailed NAICS.
[http://www.osha.gov/cgi-bin/sic/sicser5]
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NAICS - North American Industry Classification System (ALEX DOCREF, CAMDN REF HF 1042 .N67; DANA Reference Desk). The NAICS, (often pronounced "nakes"), is used by Canada, Mexico, and the U.S. for categorizing industries and businesses. The numerical code is heirarchical and industries may be identified by three, four, five, or six digits. There is no one-to-one correspondence between the SIC and NAICS. For example, NAICS has many more categories for service industries than there were in the SIC. [http://www.census.gov/epcd/www/naics.html]
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HTS - Harmonized Tariff Schedule of the United States (CAMDN REF-COM, DANA REF KF 6654.599 .U55), The HTS is the most detailed tariff classification system with over 10,000 categories, to identify U.S. imports and exports.
[http://dataweb.usitc.gov/scripts/tariff2001.asp] Use the Commodity Translation Wizard to convert between HTS numbers and SIC or NAIC codes. [http://dataweb.usitc.gov/scripts/commod_select.asp]
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The Numerical List of Manufactured and Mineral Products (ALEX U.S. DOCS; DANA Reference Desk) is an extension of the SIC codes to the product level, by the addition of three digits. Used for reporting production statistics in the Economic Census and the Current Industrial Reports. The online version requires Adobe Acrobat. [http://www.census.gov/prod/ec97/97numlist/97numlist.html]
Other Sources of Industry Categories
The private sector also tries to group corporations together for meaningful analyses, especially for investment purposes.
- The Standard & Poor's Industry Surveys (CAMDN, KLMR REF HC 106.6 .S74; DANA Reference Desk) are based on just a few hundred of the publicly-traded firms in the U.S. Only about fifty large industry groupings are covered here; some industries may actually represent a dozen or more SIC codes.
- More industry sectors (around 100) are covered by the Value Line Investment Survey (CAMDN REF HG 4501 .V2; DANA, KLMR Reference Desk) but the industry definitions used do not match those used in the Standard & Poor's Industry Surveys or any of the official classification schemes.
Problems with Industry Definitions
Apart from the differences in how the private sector and governments view industries, there is also the problem of classifying individual corporations. In most cases, the line of business that contributes the most revenue to a corporation's bottom line will determine which industry code or category it is assigned. Obviously, this approach presents a hurdle for conglomerates or even corporations with more than one distinct business focus.
In practical terms, you may have to look at profiles of several industries in order to understand the environment that a particular corporation is operating in.
Ka-Neng Au, 2 Dec 2002