The NAICS System

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There is an axiom in business that states: “You cannot manage what you do not measure”. The NAICS System The NAICS System helps us measure economic activity!

Transcript of The NAICS System

Page 1: The NAICS System

There is an axiom in business that states:

“You cannot manage what you do not measure”.

The NAICS System

The NAICS System helps us measure economic activity!

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What is the NAICS System?

• The North American Industry Classification System (NAICS) is the standard used by Federal statistical agencies in classifying business establishments for the purpose of collecting, analyzing, and publishing statistical data related to the U.S. economy.

• All jobs, products produced, and businesses in North America can be classified by this system.

• The NAICS system disaggregates all employment into different “industries”. What do we mean by

“industry”? See the next slide…

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The business population

“A plant” is a physical establishment like a factory, farm, store or warehouse

“A firm” is a business organization that operates one or more plant

“An Industry” is a group of firms that produce similar products or services

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Industry example:

An example of an Industry: limited-service family restaurants

Each of these businesses

operates within that industry!

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All economic activity can be separated into a NAICS industry

Economic Activity

Agriculture, forestry, fishing and hunting

Mining, Quarrying & Oil and Gas Extraction

Utilities

Construction

Manufacturing

Wholesale Trade

Retail Trade

Transportation and Warehousing

Information

Finance and Insurance

Real Estate, Rental and Leasing

Professional, Scientific and Technical Services

Management of Companies and Enterprises

Administrative, Waste Management and Remed.

Educational Services

Health Care and Social Assistance

Arts, Entertainment, and Recreation

Accommodation and Food Services

Other Services

Public Administration

Economic activity can be disaggregated (i.e.

broken into) 20 different industries.

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Each of those industries is not the same size (As measured by employment or other metric)

Total employment is listed as NAICS Code 1

As we look at more detail, NAICS codes become two digit.

Some industries that are big have several two digit codes.

Industries can be broken out even further in what is called 3

digit detail, 4 digit detail etc.

Let’s look at manufacturing as an example.

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Further NAICS detail: The three to six digit level

This is a pretty specific industry that makes mowers. Note it has a 6 digit NAICS code!

3 digit detail

4 digit detail5 digit detail

6 digit detail

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• Step one: Go to http://www.census.gov/eos/www/naics/

• Step two: Using the box on the upper left corner, type in key words that you might think are related.– Keep trying, broadening the description until you get results

So how do I find a NAICS code for an Industry?

 

Pet boarding services 812910 Pet Care (except Veterinary) Services

Let’s say I want to open a pet sitting service.

I’ve continued to try key words until I found my

industry!

Now I know my NAICS code!

Pet walkingPet carePet boarding

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This industry is in “other services”(The NAICS code starts with an 81)

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Click on the NAICS code to learn more about it

812910 Pet Care (except Veterinary) Services

This industry comprises establishments primarily engaged in providing pet care services (except veterinary), such as boarding, grooming, sitting, and training pets.

Cross-References. Establishments primarily engaged in--

Practicing veterinary medicine--are classified in Industry 541940, Veterinary Services;

Boarding horses--are classified in Industry 115210, Support Activities for Animal Production; and

Transporting pets--are classified in U.S. Industry 485991, Special Needs Transportation.

Go to:

No change 1997 to 2002

2002 NAICS to 1987 SIC

1997 Economic Census

Bridge Between 1997 NAICS and SIC

2002 NAICS

1997 NAICS

1987 SIC

Corresponding Index Entries

812910 812910 0752 Animal grooming services

812910 812910 0752 Animal shelters

812910 812910 0752 Boarding services, pet

812910 812910 0752 Dog pounds

812910 812910 0752 Grooming services, animal

812910 812910 0752 Guard dog training services

812910 812910 0752 Guide dog training services

812910 812910 0752 Kennels, pet boarding

812910 812910 0752 Obedience training services, pet

812910 812910 0752 Pet boarding services

812910 812910 0752 Pet grooming services

812910 812910 0752 Pet sitting services

812910 812910 0752 Pet training services

812910 812910 0752 Sitting services, pet

Reading about the industry will allow you to be sure the NAICS code matches your business.

If after reading about the NAICS code, you

think the industry does not describe what you

are looking for, try again at step one!