North American Industry Classification System (NAICS)
Contents
Unlocking the North American Industry Classification System (NAICS): A Comprehensive Guide
Understanding the NAICS
The North American Industry Classification System (NAICS) is a collaborative business classification system developed by the United States, Canada, and Mexico. It serves as a vital tool for comparing business statistics across North America, categorizing companies into industries based on similar production processes.
Exploring the History of NAICS
Initiated in 1997, NAICS replaced the outdated U.S. Standard Industrial Classification system, aiming to facilitate seamless comparison of economic data across North American countries. Regular reviews every five years ensure the system's relevance and accuracy.
Behind the Scenes: Formation and Maintenance
The Instituto Nacional de Estadistica y Geografia in Mexico, Statistics Canada, and the United States Office of Management and Budget play pivotal roles in developing and maintaining the NAICS. Collaborative efforts ensure consistent updates and improvements to the classification system.
Decoding the NAICS Coding System
NAICS employs a hierarchical six-digit coding system, encompassing 20 industry sectors ranging from goods production to various service sectors. Each company is assigned a primary NAICS code based on its main line of business, facilitating precise categorization.
Navigating NAICS Codes
Understanding NAICS codes involves decoding the six-digit structure: the first two digits denote the business sector, followed by subsector, industry group, specific industry, and finally, national industry. For instance, soybean farming is classified under NAICS code 111110.