North American Industry Classification System Explained

The North American Industry Classification System or NAICS [1] is a classification of business establishments by type of economic activity (the process of production). It is used by governments and business in Canada, Mexico, and the United States of America. It has largely replaced the older Standard Industrial Classification (SIC) system, except in some government agencies, such as the U.S. Securities and Exchange Commission (SEC).

An establishment is typically a single physical location, though administratively distinct operations at a single location may be treated as separate establishments. Each establishment is classified as an industry according to the primary business activity taking place there. NAICS does not offer guidance on organizing enterprises (companies) composed of multiple establishments.

Codes

The NAICS numbering system employs a five or six-digit code at the most detailed industry level. The first five digits are generally (although not always strictly) the same in all three countries. The first two digits designate the largest business sector; the third digit represents the subsector; the fourth digit represents the industry group; the fifth digit designates the NAICS industries, and the sixth digit represents the national industries.

NAICS aggregation levels
Digit designation Aggregation level
1-2Sector
3Subsector
4Industry group
5Industry
6National industry
Example of NAICS structure
Code Titles of categories
54Professional, scientific, and technical services
541Professional, scientific, and technical services
5411Legal services
54111Offices of lawyers
541110Offices of lawyers
2017 NAICS Sectors[2] ! Sector # !! Description !! Note
11Agriculture, Forestry, Fishing and Hunting
Mining, Quarrying, and Oil and Gas Extraction
Utilities
23 Construction
31–33 Manufacturing
41–42 Wholesale Trade (41 in Canada,[3] 42 in the United States)
44–45 Retail Trade
48–49 Transportation and Warehousing
51 Information [4]
52
53
54Professional, Scientific, and Technical Services
55Management of Companies and Enterprises
56Administrative and Support and Waste Management and Remediation Services
61 Educational Services
62 Health Care and Social Assistance
71 Arts, Entertainment, and Recreation
72 Accommodation and Food Services
81Other Services (except Public Adminstration)
91–92 (91 in Canada, 92 in the United States[5])

History

NAICS is a collaborative effort by Mexico's Spanish; Castilian: [[Instituto Nacional de Estadística y Geografía]] (INEGI), Statistics Canada, and the United States Office of Management and Budget (OMB), through its Economic Classification Policy Committee (ECPC), staffed by the Bureau of Economic Analysis (BEA), the Bureau of Labor Statistics (BLS), and the Census Bureau. The system is designed to be largely compatible with the United Nations Statistical Office's International Standard Industrial Classification system (ISIC). NAICS versions are released every five years.

With the first version, released in 1997, NAICS offered enhanced service sector coverage relative to the SIC. The 2002 revision accommodated significant changes in the Information Sector. The 2012 revision slightly reduced the number of industries and modified six sectors.[6]

NAICS changes are done at intervals of five years; the latest NAICS updated in 2022.[7]

See also

Further reading

External links

Analogues in other countries

Notes and References

  1. Web site: North American Industry Classification System (NAICS) Frequently Asked Questions (FAQs). Special Projects Staff, Service Sector Statistics Division. www.census.gov. EN-US. 2016-12-24. https://web.archive.org/web/20190305072906/https://www.census.gov/eos/www/naics/faqs/faqs.html. March 5, 2019. The North American Industry Classification System (NAICS, pronounced Nakes).
  2. Web site: 2022 . North American Industry Classification System 2022 . July 10, 2024 . NAICS Association . Executive Office of the President Office of Management and Budget . 16-20 . PDF.
  3. Web site: NAICS 201741Wholesale trade. www23.statcan.gc.ca. 17 August 2018 . Statistics Canada. 2019-10-21.
  4. "Information" includes publishing industries, motion picture and sound recording, broadcasting, telecommunications, as well as data processing and hosting.
  5. Web site: NAICS 201792Public administration. www23.statcan.gc.ca. 17 August 2018 . Statistics Canada. 2019-10-21.
  6. Web site: 14. How does NAICS 2012 differ from NAICS 2007? . . United States Census Bureau . December 18, 2012 . December 5, 2012 . dead . https://web.archive.org/web/20121205073613/https://www.census.gov/eos/www/naics/faqs/faqs.html#q14 .
  7. Web site: North American Industry Classification SystemRevision for 2022 . 2022-04-25 . Federal Register Notices . en-us.