NAICS Industry Code

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Reads it as 541511

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Background

Origin

NAICS was developed by Statistics Canada, Mexico's Instituto Nacional de Estadística y Geografía (INEGI) and the Economic Classification Policy Committee (ECPC) of the United States Office of Management and Budget.^[1] It was created against the background of the North American Free Trade Agreement, to give the three countries common definitions of their industrial structure.^[1] The final structure of NAICS was accepted by the heads of Statistics Canada, INEGI and the Office of Management and Budget of the United States on December 10, 1996.^[1] With its inception in 1997, NAICS replaced the Standard Industrial Classification (1980) of Canada, the Mexican Classification of Activities and Products (1994), and the Standard Industrial Classification (1987) of the United States.^[1] The first version, NAICS 1997, was released in March 1998.^[1]

NAICS is based on a production-oriented, or supply-based, conceptual framework: establishments are grouped into industries by similarity in the production processes they use.^[1] The unit it classifies is the producing unit or establishment, not the product.^[1] In the United States, OMB's Statistical Policy Directive No. 8 says NAICS revisions are considered every five years, in calendar years ending with 2 and 7.^[2] OMB's notice on the 2022 revision describes NAICS as designed and maintained solely for statistical purposes, even though it may also be used for administrative, regulatory or taxation functions.^[2] The 2022 revisions were scheduled to take effect for reference year 2022 in the United States and Canada, and 2023 in Mexico.^[1]

The NAICS code is hierarchical, with six digits of which the first five describe the levels the three countries use to produce comparable data.^[1] The first two digits designate the sector, the third the subsector, the fourth the industry group and the fifth the industry.^[1] The sixth digit designates national industries, and a zero in the sixth place indicates that there is no further national detail.^[1] Each country publishes its own six-digit detail, designated NAICS Canada, NAICS United States and SCIAN México.^[1] INEGI's catalogue page for Mexico's version, the Sistema de Clasificación Industrial de América del Norte, México, is titled Catálogo SCIAN 2023.^[3]

Use

Manufacturing, retail trade and transportation and warehousing each span a range of two-digit codes, written 31-33, 44-45 and 48-49.^[1] Treat the code as text, never as a number, so that hyphenated sector ranges survive and a spreadsheet does not reformat the values. (Meridian's view)

Three-country comparability is not uniform: for real estate and for finance and insurance it occurs at the industry group (four-digit) or subsector (three-digit) level.^[1] For utilities, retail trade, wholesale trade and public administration, the three agencies agreed only on the boundaries of the sector at the two-digit level.^[1] Below the agreed level, each country may add detailed industries to meet national needs, provided the detail aggregates to the NAICS level.^[1] When joining NAICS data across Canada, Mexico and the United States, roll codes up to the level the three countries actually agreed for that sector before comparing them. (Meridian's view)

Since 1997 the countries have produced five-year revisions to NAICS.^[1] The 2022 revision changes a number of NAICS codes and titles.^[2] Record which NAICS year a column was coded with before you combine data coded in different years. (Meridian's view)

NAICS has largely replaced the older Standard Industrial Classification (SIC) system, though some government agencies, such as the U.S. Securities and Exchange Commission, still use SIC.^[4] A column of industry codes from SEC filings or older records may be SIC rather than NAICS, so confirm the scheme from the header or the source before you trust a match. (Meridian's view) NAICS can also be used to classify companies and enterprises, but Statistics Canada warns it was not designed for large multi-establishment companies whose activities span several sectors.^[1]

Where you'll meet it

The Bureau of Labor Statistics' Quarterly Census of Employment and Wages (QCEW) uses NAICS to assign establishments to industries.^[5] QCEW's NAICS-coded data run from 1990 forward, with data from 2022 onward coded using the 2022 version of NAICS.^[5] Its published code list mixes NAICS codes with its own aggregate codes, such as 10 for Total, all industries and 1011 for Natural resources and mining.^[5] The same list also carries a code 99, titled Unclassified, with detail down to 999999.^[5]

The US Small Business Administration's size standards in 13 CFR 121.201 are set out by six-digit NAICS code, for example 541511 Custom Computer Programming Services.^[6]

Sources

1. [1]Introduction to the North American Industry Classification System (NAICS) Canada 2022 Version 1.0documentation
2. [2]North American Industry Classification System-Revision for 2022; Update of Statistical Policy Directive No. 8, North American Industry Classification System: Classification of Establishments; and Elimination of Statistical Policy Directive No. 9, Standard Industrial Classification of Enterprisesdocumentation
3. [3]Clasificadores - Catálogo SCIAN 2023organisation
4. [4]North American Industry Classification System - Wikipediasecondary source
5. [5]QCEW Industry Codes and Titles (For NAICS Coded Data)dataset
6. [6]eCFR :: 13 CFR 121.201 -- What size standards has SBA identified by North American Industry Classification System codes?organisation

Detection notes

In Meridian's open data

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