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!
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…
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
Industry example:
An example of an Industry: limited-service family restaurants
Each of these businesses
operates within that industry!
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.
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.
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
• 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
This industry is in “other services”(The NAICS code starts with an 81)
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!
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