BUS501: Strategic Management

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.