North American Industry Classification System (NAICS)

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Course: BUS501: Strategic Management
Book: North American Industry Classification System (NAICS)
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Date: Friday, May 3, 2024, 12:56 AM

Description

Read the introduction, which explains how industries are categorized in the United States. This system allows governments to measure the overall business activity in each sector of the economy.

Introduction

Background

In 1937, the Central Statistical Board established an Interdepartmental Committee on Industrial Classification "to develop a plan of classification of various types of statistical data by industries and to promote the general adoption of such classification as the standard classification of the Federal Government". The List of Industries for manufacturing was first available in 1938, with the List of Industries for nonmanufacturing following in 1939. These Lists of Industries became the first Standard Industrial Classification (SIC) for the United States.

The SIC was developed for use in the classification of establishments by type of activity in which they are primarily engaged; for purposes of facilitating the collection, tabulation, presentation, and analysis of data relating to establishments; and for promoting uniformity and comparability in the presentation of statistical data collected by various agencies of the United States Government, State agencies, trade associations, and private research organizations. The SIC covered the entire field of economic activities by defining industries in accordance with the composition and structure of the economy.

Since the inception of the SIC in the 1930's, the system was periodically revised to reflect the economy's changing industrial composition and organization. The last revision of the SIC was in 1987.

Rapid changes in both the U.S. and world economies brought the SIC under increasing criticism. In 1991, an International Conference on the Classification of Economic Activities was convened in Williamsburg, Virginia, to provide a forum for responding to such criticism and to explore new approaches to classifying economic activity. In July 1992, the Office of Management and Budget (OMB) established the Economic Classification Policy Committee (ECPC) and charged it with a "fresh slate" examination of economic classifications for statistical purposes. The ECPC prepared a number of issue papers regarding classification, consulted with outside users, and ultimately joined with Mexico's Instituto Nacional de Estadística, Geografía e Informática (now the Instituto Nacional de Estadística y Geografía) (INEGI) and Statistics Canada to develop the North American Industry Classification System (NAICS), which replaced the 1987 U.S. SIC and the classification systems of Canada (1980 SIC) and Mexico (1994 Mexican Classification of Activities and Products (CMAP)).

The dynamic nature of world economies continues to affect classification systems. The creators of NAICS agreed that the classification system should be reviewed every five years, and revised as appropriate to reflect the changing economies of the three countries. The U.S. statistical programs implemented NAICS for the first time in 1997. NAICS was revised in 2002, 2007, and 2012. This 2017 NAICS revision was undertaken to achieve one main goal – to modify or create industries to reflect new, emerging, or changing activities and technologies.

The impact of NAICS on various countries has brought about a renewed effort for additional convergence with the many industry classifications used throughout the world. Future revisions of NAICS will continue to strive for greater global comparability.


Source: U.S. Census Bureau, https://www.census.gov/naics/

Purpose of NAICS

NAICS is an industry classification system that groups establishments into industries based on the similarity of their production processes. It is a comprehensive system covering all economic activities. There are 20 sectors and 1,057 industries in 2017 NAICS United States.

NAICS was initially developed and subsequently revised by Mexico's INEGI, Statistics Canada, and the U.S. ECPC (the latter acting on behalf of OMB) to provide common industry definitions for Canada, Mexico, and the United States that will facilitate economic analyses of the economies of the three North American countries. The statistical agencies in the three countries produce information on inputs and outputs, industrial performance, productivity, unit labor costs, and employment. NAICS, which is based on a production-oriented concept, ensures maximum usefulness of industrial statistics for these and similar purposes. NAICS United States is used by U.S. statistical agencies to facilitate the collection, tabulation, presentation, and analysis of data relating to establishments; and to provide uniformity and comparability in the presentation of statistical data describing the U.S. economy.

NAICS United States is designed for statistical purposes. Although the classification also may be used for various administrative, regulatory, and taxation purposes, the requirements of government agencies that use it for nonstatistical purposes played no role in its development or subsequent revision.

Development of NAICS as a Replacement for the U.S. SIC

The U.S. ECPC established by OMB in 1992 was chaired by the Bureau of Economic Analysis, U.S. Department of Commerce, with representatives from the Bureau of the Census, U.S. Department of Commerce, and the Bureau of Labor Statistics, U.S. Department of Labor. The ECPC was asked to examine economic classifications for statistical purposes and to determine the desirability of developing a new industry classification system for the United States based on a single economic concept. On March 31, 1993, OMB published a Federal Register notice (58 FR 16990-17004) announcing the intention to revise the SIC for 1997, the establishment of the ECPC, and the process for revising the SIC.

In July 1994, OMB announced plans to develop a new industry classification system in cooperation with Mexico's INEGI and Statistics Canada. The new system – NAICS – replaced the U.S. SIC. The concepts of the new system and the principles upon which NAICS was to be developed were announced in a July 26, 1994, Federal Register notice (59 FR 38092-38096) and were as follows:

  1. NAICS will be erected on a production-oriented or supply-based conceptual framework. This means that producing units that use identical or similar production processes will be grouped together in NAICS.
  2. The system will give special attention to developing production-oriented classifications for (a) new and emerging industries, (b) service industries in general, and (c) industries engaged in the production of advanced technologies.
  3. Time series continuity will be maintained to the greatest extent possible. However, changes in the economy and proposals from data users must be considered. In addition, adjustments will be required for sectors where the United States, Canada, and Mexico have incompatible industry classification definitions in order to produce a common industry system for all three North American countries.
  4. The system will strive for compatibility with the two-digit level of the International Standard Industrial Classification of All Economic Activities of the United Nations.

The structure of NAICS was developed in a series of meetings among the three countries. Public proposals for individual industries from all three countries were considered for acceptance if the proposed industry was based on the production-oriented concept of the system. In the United States, public comments also were solicited as groups of subsectors of NAICS were completed and agreed upon by the three countries. The ECPC published the proposed industries for those subsectors in a series of five successive Federal Register notices, in 1995 and 1996, asking for comments from interested data users.

Revision of NAICS for 2017

OMB published a notification of potential revision to NAICS for 2017 in a May 22, 2014, Federal Register notice (79 FR 29626-29629). This notice solicited comments on: 1) new and emerging industries for consideration in potential revisions to NAICS for 2017; 2) the electronic dissemination of NAICS 2017; and 3) updating the structure of the oil and gas industries for NAICS 2017. This notice also provided an update on the treatment of manufacturing units that outsource all transformation activities. In addition, OMB published a notification regarding implementation of the Factoryless Goods Producer (FGP) classification in NAICS 2017 in an August 8, 2014, Federal Register notice (79 FR 46558-46559). This notice stated the directive of the August 17, 2011, Federal Register notice (76 FR 51240-51243) was no longer in force, to allow for additional research, testing, and evaluation of FGPs.

After considering all proposals from the public, consulting with a number of U.S. data users and industry groups, and undertaking extensive discussions with Statistics Canada and Mexico's Instituto Nacional de Estadística y Geografía (INEGI), the ECPC formulated a set of recommendations for revisions to NAICS for 2017. OMB published a solicitation of public comments on these recommendations in an August 4, 2015, Federal Register notice (80 FR 46480- 46484). After reviewing comments to that notice and conducting further consultation with data users and industry groups, OMB decided to adopt the ECPC recommendations presented in the August 4, 2015, notice. OMB published a notice of final decisions regarding NAICS revisions for 2017 in an August 8, 2016, Federal Register notice (81 FR 52584).

Conceptual Framework

NAICS is erected on a production-oriented or supply-based conceptual framework that groups establishments into industries according to similarity in the processes used to produce goods or services. A production-oriented industry classification system ensures that statistical agencies in the three countries can produce information on inputs and outputs, industrial performance, productivity, unit labor costs, employment, and other statistics and structural changes occurring in each of the three economies.

When an industry is defined on a production-oriented concept, producing units within the industry's boundaries share a basic production process; they use closely similar technology. In the language of economics, producing units within an industry share the same production functions; producing units in different industries have different production functions. The boundaries between industries thus demarcate, in principle, differences in production processes and production technologies.

The reasoning behind the three countries' decision to base NAICS on a production-oriented concept is summarized as follows: An industry is a grouping of economic activities. Though it inevitably groups the products of the economic activities that are included in the industry definition, it is not solely a grouping of products; put another way, an industry groups producing units. Accordingly, an industry classification system provides a framework for collecting data on inputs and outputs together.

The uses of economic data that require that data on inputs and outputs be used together and be collected on the same basis include production analyses, productivity measurement, and studying input usage and input intensities. The North American statistical agencies developed NAICS using a production-oriented concept as the framework for two reasons: (1) an industry classification system groups producing units, not products or services; and (2) groupings of producing units permit the collection of data on inputs and outputs on a comparable basis, which is required for production-oriented analysis, but do not facilitate a comprehensive collection of data on the total output of any particular good or service, which is required for market-oriented analysis. Thus, the efficient organizing concept of an industry classification system is production-oriented rather than market-oriented.

Structure of NAICS

The structure of NAICS is hierarchical. The first two digits of the structure designate the NAICS sectors that represent general categories of economic activities.

NAICS classifies all economic activities into 20 sectors. The NAICS sectors, their two-digit codes, and the distinguishing activities of each are:

11 Agriculture, Forestry, Fishing and Hunting – Activities of this sector are growing crops, raising animals, harvesting timber, and harvesting fish and other animals from farms, ranches, or the animals' natural habitats.

21 Mining, Quarrying, and Oil and Gas Extraction – Activities of this sector are extracting naturally occurring mineral solids, such as coal and ore; liquid minerals, such as crude petroleum; and gases, such as natural gas; and beneficiating (e.g., crushing, screening, washing, and flotation) and other preparation at the mine site, or as part of mining activity.

22 Utilities – Activities of this sector are generating, transmitting, and/or distributing electricity, gas, steam, and water and removing sewage through a permanent infrastructure of lines, mains, and pipe.

23 Construction – Activities of this sector are erecting buildings and other structures (including additions); heavy construction other than buildings; and alterations, reconstruction, installation, and maintenance and repairs.

31-33 Manufacturing – Activities of this sector are the mechanical, physical, or chemical transformation of materials, substances, or components into new products.

42 Wholesale Trade – Activities of this sector are selling or arranging for the purchase or sale of goods for resale; capital or durable nonconsumer goods; and raw and intermediate materials and supplies used in production, and providing services incidental to the sale of the merchandise.

44-45 Retail Trade – Activities of this sector are retailing merchandise generally in small quantities to the general public and providing services incidental to the sale of the merchandise.

48-49 Transportation and Warehousing – Activities of this sector are providing transportation of passengers and cargo, warehousing and storing goods, scenic and sightseeing transportation, and supporting these activities. 51 Information – Activities of this sector are distributing information and cultural products, providing the means to transmit or distribute these products as data or communications, and processing data.

52 Finance and Insurance – Activities of this sector involve the creation, liquidation, or change in ownership of financial assets (financial transactions) and/or facilitating financial transactions.

53 Real Estate and Rental and Leasing – Activities of this sector are renting, leasing, or otherwise allowing the use of tangible or intangible assets (except copyrighted works), and providing related services.

54 Professional, Scientific, and Technical Services – Activities of this sector are performing professional, scientific, and technical services for the operations of other organizations.

55 Management of Companies and Enterprises – Activities of this sector are the holding of securities of companies and enterprises, for the purpose of owning controlling interest or influencing their management decisions, or administering, overseeing, and managing other establishments of the same company or enterprise and normally undertaking the strategic or organizational planning and decision-making role of the company or enterprise.

56 Administrative and Support and Waste Management and Remediation Services – Activities of this sector are performing routine support activities for the day-to-day operations of other organizations.

61 Educational Services – Activities of this sector are providing instruction and training in a wide variety of subjects.

62 Health Care and Social Assistance – Activities of this sector are providing health care and social assistance for individuals.

71 Arts, Entertainment, and Recreation – Activities of this sector are operating or providing services to meet varied cultural, entertainment, and recreational interests of their patrons.

72 Accommodation and Food Services – Activities of this sector are providing customers with lodging and/or preparing meals, snacks, and beverages for immediate consumption.

81 Other Services (except Public Administration) – Activities of this sector are providing services not elsewhere specified, including repairs, religious activities, grantmaking, advocacy, laundry, personal care, death care, and other personal services.

92 Public Administration – Activities of this sector are administration, management, and oversight of public programs by Federal, State, and local governments.

NAICS uses a six-digit coding system to identify particular industries and their placement in this hierarchical structure of the classification system. The first two digits of the code designate the sector, the third digit designates the subsector, the fourth digit designates the industry group, the fifth digit designates the NAICS industry, and the sixth digit designates the national industry. A zero as the sixth digit generally indicates that the NAICS industry and the U.S. industry are the same.

The subsectors, industry groups, and NAICS industries, in accord with the conceptual principle of NAICS, are production-oriented combinations of establishments. However, the production distinctions become more narrowly defined as one moves down the hierarchy.

NAICS agreements permit each country to designate detailed industries, below the level of a NAICS industry, to meet national needs. The United States has such industry detail in many places in the classification system to recognize large, important U.S. industries that cannot be recognized in the other countries because of size, specialization, or organization of the industry.

Typically the level at which comparable data will be available for Canada, Mexico, and the United States is the five-digit NAICS industry; for some sectors (or subsectors or industry groups) however, the three countries agreed upon the boundaries at a higher level of detail rather than the detailed industry structure (five-digit). There is agreement at the sector level for Wholesale Trade; Retail Trade; and Public Administration. There is agreement either at the industry group (four-digit) or subsector (three-digit) level for one of the three subsectors in the Mining, Quarrying, and Oil and Gas Extraction sector, one of the three industry groups in the Utilities sector, one of the ten industry groups in the Construction sector, two of the four subsectors in the Finance and Insurance sector, one of the three industry groups in the Real Estate subsector, and two of the four subsectors in the Other Services (except Public Administration) sector.

Differences in the economies of the three countries or time constraints necessitated establishing comparability at a higher level of detail for the sectors and subsectors noted above. For each of these sectors, except Wholesale Trade and Public Administration, Canada and the United States have agreed upon an industry structure and hierarchy to ensure comparability of statistics between those two countries. Canada and the United States also have established the same national detail (six-digit) industries where possible, adopting the same codes to describe comparable industries. For this reason, the numbers of the U.S. industries may not be consecutive. In a few cases, it was necessary for the United States to use all of the numbers available to establish its six-digit detail so that the same six-digit codes do not necessarily represent comparable industries in the U.S. and Canada.

NAICS with U.S. detail is known as NAICS United States, while Canada and Mexico produce six-digit detail and publish that detail as NAICS Canada and NAICS (SCIAN in Spanish) Mexico.

Definition of an Establishment

NAICS is a classification system for establishments. The establishment as a statistical unit is defined as the smallest operating entity for which records provide information on the cost of resources – materials, labor, and capital – employed to produce the units of output. The output may be sold to other establishments and receipts or sales recorded, or the output may be provided without explicit charge, that is, the good or service may be "sold" within the company itself.

The establishment, in NAICS United States, is generally a single physical location where business is conducted or where services or industrial operations are performed (for example, a factory, mill, store, hotel, movie theater, mine, farm, airline terminal, sales office, warehouse, or central administrative office). There are cases where records identify distinct and separate economic activities performed at a single physical location (e.g., shops in a hotel). These retailing activities, operated out of the same physical location as the hotel, are identified as separate establishments and classified in the Retail Trade sector, while the hotel is classified in the Accommodation subsector. In such cases, each activity is treated as a separate establishment provided: (1) no one industry description in the classification includes such combined activities; (2) separate reports can be prepared on the number of employees, their wages and salaries, sales or receipts, and expenses; and (3) employment and output are significant for both activities.

Exceptions to the single location exist for physically dispersed operations, such as construction, transportation, and telecommunications. For these activities the individual sites, projects, fields, networks, lines, or systems of such dispersed activities are not normally considered to be establishments. The establishment is represented by those relatively permanent main or branch offices, terminals, stations, and so forth, that are either (1) directly responsible for supervising such activities, or (2) the base from which personnel operate to carry out these activities.

Although an establishment may be identical with the enterprise (company), the two terms should not be confused. An enterprise (company) may consist of more than one establishment. Such multiunit enterprises may have establishments in more than one industry in NAICS. If such enterprises have a separate establishment primarily engaged in providing headquarters services, these establishments are classified in Sector 55, Management of Companies and Enterprises.

Although all establishments have output, they may or may not have receipts. In large enterprises, it is not unusual for establishments to exist to solely serve other establishments of the same enterprise (auxiliary, or enterprise support, establishments). In such cases, these units often do not collect receipts from the establishments they serve. This type of support (captive) activity is found throughout the economy and involves goods-producing activities as well as services. Units that carry out support activities for the enterprise to which they belong are classified, to the extent feasible, according to the NAICS code related to their own activity. This means that warehouses providing storage facilities for their own enterprise are classified as warehouses. For certain analytical purposes, an alternative code may be assigned corresponding to the activity of the enterprise that they support.

Determining an Establishment’s Industry Classification

An establishment is classified in an industry when its primary activity meets the definition for that industry. Because establishments may perform more than one activity, it is necessary to determine procedures for identifying the primary activity of the establishment.

In most cases, if an establishment is engaged in more than one activity, the industry code is assigned based on the establishment's principal product or group of products produced or distributed, or services rendered. Ideally, the principal good or service should be determined by its relative share of current production costs and capital investment at the establishment. In practice, however, it is often necessary to use other variables such as revenue, shipments, or employment as proxies for measuring significance.

There are two types of combined activities that are given special attention in NAICS. They are vertical integration and joint production. These combined activities have an economic basis and occur in both goods-producing and services-producing sectors. In some cases, there are efficiencies to be gained from combining certain activities in the same establishment. Some of these combinations occur so commonly or frequently that their combination can be treated as a third activity in its own right and explicitly classified in a specific industry.

One approach to classifying these activities would be to use the primary activity rule, that is, whichever activity is largest. However, the fundamental principle of NAICS is that establishments that employ the same production process should be classified in the same industry. If the premise that the combined activities correspond to a distinct third activity is accepted, then using the primary activity rule would place establishments performing the same combination of activities in different industries, thereby violating the production principle of NAICS. A second reason for NAICS recognizing combined activities is to improve the stability of establishment classification, both over time and among the various agencies that implement the classification. An establishment should remain classified in the same industry unless its production process changes, and different agencies should code the same establishment or type of establishment in the same way. A consistent treatment of establishments with combined activities is more likely if they are classified to a single industry.

Vertical integration involves consecutive stages of fabrication or production processes in which the output of one step is the input of the next. In general, establishments are classified based on the final process in a vertically integrated production environment, unless specifically identified as classified in another industry. For example, paper may be produced either by establishments that first produce pulp and then consume that pulp to produce paper or by those establishments producing paper from purchased pulp. NAICS explicitly specifies that both of these types of paper-producing processes should be classified in NAICS 32212, Paper Mills, the final step in paper manufacturing, rather than in NAICS 32211, Pulp Mills. In other cases, NAICS specifies that vertically integrated establishments are classified in the industry representing the first stage of the manufacturing process. For example, steel mills that make steel and also perform other activities such as producing steel castings are classified in NAICS 33111, Iron and Steel Mills and Ferroalloy Manufacturing, the first stage of the manufacturing process.

The joint production of goods or services represents the second type of combined activities. For example, automobile dealers both sell and repair autos; automotive parts dealers may both sell parts and repair automobiles; and musical instrument stores may both sell and rent instruments. In the Manufacturing sector, establishments may make two different products such as men's suits and women's suits, activities that are classified in two different NAICS United States detailed industries. In general, receipts/sales and revenue data are used as a proxy to determine primary activity for these establishments. The assumption is that the activity generating the most receipts is also the activity using the most resources and most indicative of the production process.

In some cases, however, these combined activities have been assigned to a specific NAICS industry. Most of these activities involve either the sale and repair of goods or the sale and rental of goods in the same establishment. For example, establishments that both sell automobile parts and repair automobiles are classified in NAICS 44131, Automotive Parts and Accessories Stores, and music stores that both sell and rent musical instruments are classified in NAICS 45114, Musical Instrument and Supplies Stores. In other cases, specific industries are identified for these combined activities, such as NAICS 44711, Gasoline Stations with Convenience Stores.

Classification rules related to the agreement to permit individual country detail at the six-digit level for NAICS sometimes result in less comparable NAICS industries at the five-digit level and above. For example in NAICS, the assignment of the industry code is at the most detailed level of the classification (the six-digit U.S. detail code), except for Agriculture. That is, if the value of an establishment's production consists of 30 percent from computers, 30 percent from computer storage devices, and 40 percent from semiconductors and related devices, it is classified in U.S. detail industry 334413, Semiconductor and Related Device Manufacturing, that is aggregated to NAICS 33441, Semiconductor and Other Electronic Component Manufacturing, the level that comparable information is shown for all three countries. If the classification for the above example were at the five-digit NAICS level, that establishment would be classified in NAICS 33411, Computer and Peripheral Equipment Manufacturing. There would then be more comparable information at the NAICS level, but it would be impossible to classify this establishment to a U.S. detail six-digit industry.

In Agriculture, however, NAICS coding begins at the top of the structure and continues down to the most detailed level (the six-digit U.S. detail code). The existence of a 50 percent rule in Agriculture and the presence of combination industries based on families of related agricultural products with none accounting for 50 percent or more of production require a top down coding procedure rather than coding at the most detailed level first as is done in the balance of the classification.

Use of Reporting Units Other than Establishments

NAICS is based on the economic principle that establishments should be grouped together based on their production processes. The NAICS definition of the establishment ensures that, at some level, "establishments": (1) identify the most refined (generally smallest) individual entity possible; (2) can provide the information needed when surveying economic activity; and (3) when aggregated, approximate the statistical universe of economic activity. Each economic survey program, in practice, determines whether the establishment is the most appropriate reporting unit to meet the three criteria listed above with respect to the program's objectives. If not, an alternative reporting unit is identified.

For example, an economic survey of employment or wage data may choose the establishment – generally a physical location – as the reporting unit. Physical locations generally have records for the number of employees and their wages readily available. Therefore, it is reasonable to expect that separate wage and employment data are available for each switching station in a multiunit telecommunications carrier enterprise and the physical location is a logical choice for the reporting unit.

If the economic survey collects output data, the individual switching stations would not have the total number of telephone calls or a complete accounting of inputs and outputs of the multiunit telecommunications carrier. If a telephone call is routed through three different switching stations and the price is determined at a fourth location, all of the related locations would need to be merged into an alternative reporting unit to measure the volume and value of the output. In this case, the physical location is not an appropriate reporting unit. The level of aggregation of physical units required to create reporting units will vary greatly depending on the business activity being studied. To efficiently define reporting units, statistical surveys need to evaluate the characteristics of the activities being studied and the organizational structure of the entities producing goods or services. In some cases, the physical location is appropriate, sometimes units will need to be grouped based on homogeneous production characteristics or geographical groupings, and in other cases, the enterprise (company) may form the most appropriate reporting unit.

The practical variation in reporting unit definitions affects comparability of data. A count of units defined as physical locations will be different from a count of units defined based on the need for complete input and output records in the telecommunications industries. It is critical that each data provider clearly identify the reporting unit definition used when presenting summary statistics. The analysis of statistical data from a variety of sources requires the transparency of clearly defined reporting units.

While the reporting unit definition can vary, NAICS is a classification system for establishments and is based on grouping establishments with similar production function characteristics.

Comparison of NAICS to the International Standard Industrial Classification of All Economic Activities (ISIC)

Recognizing the need for international comparability of economic statistics, the United Nations (UN) first adopted an International Standard Industrial Classification system in 1948. Revisions to the ISIC structure and codes were adopted by the UN's Statistical Commission in 1958, 1968, 1989, 2002, and 2007.

Similar to NAICS, ISIC was designed primarily to provide classifications for grouping activities (rather than enterprises or firms), and the primary focus for the ISIC classification system is the kind of activity in which establishments or other statistical entities are engaged. The main criteria employed in delineating divisions and groups (the two- and three-digit categories, respectively) of ISIC are: (a) the character of the goods and services produced; (b) the uses to which the goods and services are put; and (c) the inputs, the process, and the technology of production.

The third classification criterion of the ISIC is the conceptual foundation of NAICS, and thus, NAICS is aligned more closely with ISIC than was the 1987 SIC system. However, there are differences between the NAICS and ISIC classification schemes. Most important, perhaps, is the single (production process) conceptual framework of NAICS. As noted elsewhere, this is unique among industry classifications.

ISIC, Rev. 4, groups economic activity into 21 broad Sections, 88 Divisions, 238 Groups, and 420 Classes. In the coding system, Sections are distinguished by the letters A through U, and the Divisions, Groups, and Classes are identified as the two-digit, three-digit, and four-digit groupings, respectively. As was the case with 2007 NAICS, the most recent revision of ISIC also focused on improvements to the detail in services sections.

In the development and subsequent revision of NAICS industries, the statistical agencies of the three countries strove to create industries that did not cross ISIC two-digit boundaries. The 2007 revisions of the NAICS and ISIC increased comparability beyond previous levels. Similar to the 2012 NAICS revision, this 2017 NAICS revision maintains a similar level of comparability with ISIC, Rev. 4.