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The NAICS System

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NAICS System

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The NAICS System

  1. 1. 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!
  2. 2. 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…
  3. 3. 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
  4. 4. Industry example: An example of an Industry: limited-service family restaurants Each of these businesses operates within that industry!
  5. 5. 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.
  6. 6. 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.
  7. 7. 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 detail 5 digit detail 6 digit detail
  8. 8. • 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
  9. 9. This industry is in “other services” (The NAICS code starts with an 81)
  10. 10. 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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