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Industry Research
This guide provides resources and search tips for researching industries.
NAICS North American Industry Classification System
- NAICS is pronounced Nakes.
- 6-digit hierarchical coding system for 20 industry sectors.
- Developed in 1997 by the Office of Management and Budget (OMB) to replace SIC as the standard for Federal statistical agencies in classifying business establishments for the collection, tabulation, presentation, and analysis of statistical data describing the U.S. economy.
- Frequently used by other agencies and organizations for various administrative, regulatory, contracting, procurement, taxation, and other non-statistical purposes.
- Adopted by the U.S., Canada and Mexico to provide comparability in business statistics.
- Based on similar processes (inputs) for production activities, meaning that it groups establishments into industries according to similarity in the processes used to produce goods or services.
- Compatible with the United Nations International Standard Industrial Classification (ISIC).
- Updated every five years prior to the Economic Census (1997, 2002, 2007, 2012, 2017, 2022).
- Industry Classifications Reflect Changing EconomyU.S. Census Bureau Blog "Random Samplings" on the process of NAICS revision every five years to reflect changes in the economy.
SIC Standard Industrial Classification System
- 4-digit hierarchical coding system for 10 divisions.
- SIC classifies establishments by their primary activity focusing on similar products and services (outputs).
- Established in 1937, it was replaced by NAICS in 1997.
- Last updated in 1987, SIC is still used in many business databases.
Compare NAICS & SIC
The NAICS taxonomy is based on a production-oriented, or supply-based, conceptual framework instead of an output-based framework of SIC. This means that producing units that use identical or similar production processes are grouped together in NAICS.
While many NAICS industries directly compare with SIC industries, a number of SIC industries were split or combined to form a new NAICS industry, as illustrated in this table:
Other Industry Classifications
- United Nations International Standard Industrial Classification (ISIC)Classifies data according to kinds of economic activity in the fields of production, employment, gross domestic product and other statistical areas. ISIC is a basic tool for international comparability of data.
- National ClassificationsLinks to classification systems for economic activity and products used in different countries.
- NACEEUROSTAT: Statistical classification of economic activities in the European Community.
- Industry ClassificationsUseful Wikipedia overview of industry classifications.
Financial Market Industry Classifications
The market-oriented approach to classifying companies is based on the way the company earns revenue and how customers use the company's products. These classifications are used in financial analysis and investment research.
- Global Industry Classification Standard (GICS)- GICS was developed by Standard & Poor's (S&P) and Morgan Stanley Capital International (MSCI) as a basis for S&P and MSCI financial market indexes. GICS consists of 10 sectors > 24 industry groups > 67 industries > 156 sub-industries.
- Each company is assigned a single sub-industry code by centralized authority based on its primary business activity, as measured by the revenues derived from that activity.
- Companies participating in different sectors may be classified in Industrial Conglomerates or Multi-Sector Holdings. - Industry Classification Benchmark (ICB)ICB is an industry classification taxomony developed by Dow Jones and FTSE. It is used to segregate markets into sectors within the macroeconomy. The ICB uses a system of 10 industries > divided into 19 supersectors > 41 sectors > 114 subsectors. Used by NASDAQ, NYSE and several other markets. Check out links to primary sources in this Wikipedia overview.
NOTE: Be aware of terminology differences, for example, industry and sector have opposite meanings in NAICS and ICB.
The Fidelity Learning Center offers insights on understanding sectors, industries, and how to classify companies:
- Fidelity: What Are Sectors and Industries? FAQsHow is a company assigned to a sector or industry? How NAICS and SIC compare to GICS? How many industries and sectors are there?
- Fidelity: Global Industry Classification Standard (GICS)Overview of GICS.
- Fidelity: Know Your Sectors and IndustriesComparison of Major Sector Classification Systems (GICS, ICB, TRBC).
- Fidelity: The Limitations of Sector Classification SystemsHow to classify companies that serve many markets or produce many things for sector investing?