Primary, Secondary & Ancillary activities & how to define one for your business
Economic activity is at the heart of SSIC classifications, and businesses must grasp this to choose the appropriate SSIC code. According to SSIC 2020, “An economic activity occurs when resources such as labour, capital, goods, and services are used in a production process to produce goods and services.” It states that there are 3 kinds of economic activity:
- Principal activity refers to the activity that contributes the most to the value added (VA) of the goods and services produced by the economic unit, or the activity with the highest VA among the activities of the unit.
- Secondary activity refers to each separate activity undertaken by the economic unit which is not the unit’s principal activity.
- Ancillary activity refers to activity undertaken to support the main productive activities of an economic unit by providing goods or services entirely for the use of that unit. Examples of such activities are human resource functions, bookkeeping, purchasing, storage and sales promotion.
To put this into context, if your primary activity is the retail selling of mobile phones, a secondary activity may be mobile phone repair, while ancillary activities could include everything from human resources and accounting to sales and advertising.
| Activity of the economic unit | Example |
|---|---|
| Principal activity | SSIC 47411 ‘Retail sale of handphones and peripheral equipment’ (VA = 10) |
| Secondary activity | SSIC 95120 ‘Repair of communications equipment (e.g. mobile phones and fax machines)’ (VA = 5) |
| Ancillary activity | Provision of human resource services to hire workers for the handphone retail shop; repair and maintenance of tools to support the firm’s communication equipment repair business |
Source: SingStat



