NAICS stands for “North American Industry Classification System.” NAICS was developed in 1997 to replace the Standard Industrial Classification (SIC) system that had been in use since 1937.
NAICS codes are used to classify businesses by type, so that data for businesses in North America (i.e., the United States, Mexico, and Canada) can be presented and analyzed in a uniform manner. Codes are reviewed every five years to ensure their relevance, accuracy, and timeliness.
NAICS codes can be up to 6 digits long. The more digits there are in a code, the greater the level of specificity in the classification of a business. The meaning of the digits in a NAICS code is:
Digits 1-2: Economic sector
Digit 3: Economic subsector
Digit 4: Industry group
Digit 5: NAICS industry
Digit 6: National industry
NAICS codes are assigned to a company based on the company’s primary business activity/activities.
