Subsector

A subsector is a subdivision of a sector, representing a more specific group of activities, products, or firms within a broader category. Sectors are broad areas of economic or organizational activity, while subsectors provide a narrower, more detailed grouping that allows for finer analysis and reporting.

In the economy, subsectors help classify and compare performance across industries. For example, within the manufacturing sector, subsectors might include automotive, electronics, and textiles. Within the energy sector, subsectors can be oil and gas, renewable energy, and energy services. Similar subdivision occurs in services and technology, where subsectors include financial services, hospitality, software, and semiconductors.

Classification systems such as the Global Industry Classification Standard (GICS) and the North American Industry Classification System (NAICS) define subsectors to enable consistent data collection and analysis. These frameworks typically use hierarchical levels, including sector, subsector, industry group, industry, and sub-industry, though the exact terminology may vary.

Subsectors are used in statistics, policy analysis, corporate planning, and investment management. They enable targeted reporting, resource allocation, market research, and the construction of investment indices and sector funds. The boundaries of subsectors can evolve with technological change, regulatory developments, and shifts in consumer demand, which may lead to reclassification over time.

Limitations include variation in standards across classification systems and potential overlap between subsectors. Because definitions are not universally standardized, cross-country or cross-industry comparisons should be interpreted with awareness of differing criteria.