NAICS conceptual framework

North American Industry Classification System (NAICS) Conceptual Framework for Nats-od

What is the North American Industry Classification System (NAICS) and what is its objective?

The North American Industry Classification System (NAICS) is the only industry classification system in the North American region. NAICS contains categories (classified in a hierarchical structure of economic activities) agreed to trilaterally between Canada, the United States and Mexico. NAICS agreements permit each country to designate detailed industries to meet national needs at the lowest level of aggregation.

The goal of NAICS is to provide a single, consistent and updated source for the collection, analysis and presentation of statistics on an industry basis, reflecting the structure of the economy. NAICS is the basis for the creation, presentation and dissemination of economic statistics. Its adoption allows sharing of economic data produced in the North American region.

How was NAICS built?

The North American Industry Classification System (NAICS) is unique among industry classifications because it was built based on a consistent framework. Economic units that have similar production processes or functions (in the context of NAICS these terms are used interchangeably) are classified in the same industry because the categories are defined, as far as possible, according to production processes. This supply-based, or production-oriented, economic concept was adopted in NAICS because it best responds to the need for the three countries to have a framework to collect and publish information on inputs and outputs together and consistently. Examples of applications of NAICS include measuring productivity, unit labor costs and the amount of capital used in production, the construction of input-output tables, and other applications involving the analysis of the relations between units of production in the economy. This framework facilitates such analysis.

By sharing a common structure, NAICS allows greater comparability of economic statistics of the three countries of North America. Note that NAICS has conceptual comparability in the sense of it using as closely as possible, the same conceptual framework for its construction, namely the production process or production function. Exceptions to this conceptual comparability have been explicitly accepted or agreed trilaterally.

Is there a single NAICS for the three countries of North America?

There is no a single version of NAICS that encompasses the three countries, as each country has its own domestic version. The design of the general structure of NAICS is considered common between Canada, the United States and Mexico, but there is also a domestic part prepared by each of the countries. The resulting domestic classifications are called NAICS Canada, NAICS United States and SCIAN Mexico.

NAICS consists of 20 sectors, which represent general categories of economic activities.

What is the structure of NAICS?

NAICS is composed of five levels: sector (the most aggregated level, identified by two digits), subsector (designated by three digits), industry group (four digits), NAICS industry (five digits) and national industry (the most disaggregated level, identified by six digits).

"T" superscript = Canadian, Mexican, and United States industries are comparable.

NAICS sectors:

What is the relationship between NAICS and other international classification systems?

Statistics compiled by NAICS are comparable to those based on the International Standard Industrial Classification of All Economic Activities (ISIC).

Each of these economic classifications provides a basis for obtaining information on the economic structure of the region, country, etc.

The United Nations (UN), in the document International Family of Economic and Social Classifications, mentions that this family is composed of the classifications that have been registered in the Inventory of Classifications of the United Nations, and reviewed and approved by the statistics commission of this body and other competent authorities.

Taking into account the need to provide data that may be subject to international comparability, in the development of NAICS, agencies from Canada, the United States and Mexico strove to create categories that did not cross the 2-digit level of ISIC Rev. 3. The revisions to NAICS 2012/2013 and earlier were carried out to meet the same objective, although for NAICS 2007 and 2012/2013, Revision 4 of ISIC was used. The review process to generate the ISIC Rev. 4 classification, supported by NAICS experts worldwide, resulted in an ISIC Rev. 4 that was more compatible with NAICS, especially in the services area.

What is the definition and principles upon which sector 48-49 Transportation and warehousing is based for Canada, the United States and Mexico?

Throughout history, the transportation sector has represented the foundation on which most of the economic activities and society itself literally moves.

Below are NAICS definitions of this sector from Canada, the United States and Mexico describing the principles upon which they are based:

Mexico SCIAN 2013 48-49 Transportation and Warehousing^T

This sector comprises economic units primarily engaged in transporting people and cargo, providing specialized services directly related to transport, and storage of goods. Given that the activities of the post offices and couriers consist of transporting goods, they were also classified in this sector.

Within transportation, the breakdown was established according to the different modes of transportation: air, rail, water, trucking, bus transportation, pipeline and tourism. The postal breakdown differs by the traditional postal service, usually operated by the State, and local package delivery. Meanwhile, storage and warehouses is subdivided according to the type of facilities operated. A common feature of most economic units in the sub-transport and post is the fact that they are structured as networks, with facilities -and workers spread over large geographic areas.

Related to transportation are specialized support services for each mode of transport, including services to air travel and shipping, management of ports and docks, management of bus stations, and establishments serving other modes of transport, such as customs agencies, and brokerage services for freight transport. Furthermore, services related to transport include repair and maintenance of transport equipment such as outdoor cleaning of aircraft at the airport or wagons and locomotives in a rail terminal, repair services, and conversion of ships and yachts.

Included also are economic units primarily engaged in the rental of aircraft for purposes other than transport, such as spraying, aerial photography, and special flying services for the transportation of refined petroleum products; moving services, trucking including trucking requiring temperature control; urban and suburban transport recognized as mass transit metropolitan routes (considered as those routes that connect different parts within the same metropolitan area but are made between different states) provided on buses, microbuses, minibuses, vans, etc.; passenger transport via subway; passenger transport minicabs, and medical services to move the elderly, disabled, frail or sick; rental of boats with crew for fishing; loading and unloading of goods and luggage; provision of rights of way in railways; the operation of headlamps; delivery services for food, clothing or medicine; economic units outsourced by post offices, primarily active in the local mail delivery and operation of rural post offices, and the provision of logistics services, which consist of coordinating activities for the distribution of goods. These economic units perform their activity by outsourcing services provided by other economic units such as transport services, storage, packaging and labeling, and customs. These activities are outsourced to third parties, and do not perform transportation services, storage, etc.

NAICS 2012 United States 48-49 Transportation and Warehousing^T

The Transportation and Warehousing sector includes industries providing transportation of passengers and cargo, warehousing and storage for goods, scenic and sightseeing transportation, and support activities related to modes of transportation. Establishments in these industries use transportation equipment or transportation related facilities as a productive asset. The type of equipment depends on the mode of transportation. The modes of transportation are air, rail, water, road, and pipeline.

The Transportation and Warehousing sector distinguishes three basic types of activities: Subsectors for each mode of transportation, a subsector for warehousing and storage, and a subsector for establishments providing support activities for transportation. In addition, there are subsectors for establishments that provide passenger transportation for scenic and sightseeing purposes, postal services, and courier services.

A separate subsector for support activities is established in the sector because, first, support activities for transportation are inherently multimodal, such as freight transportation arrangement, or have multimodal aspects. Secondly, there are production process similarities among the support activity industries.

One of the support activities identified in the Support Activities for Transportation subsector is the routine repair and maintenance of transportation equipment (e.g., aircraft at an airport, railroad rolling stock at a railroad terminal, or ships at a harbor or port facility). Such establishments do not perform complete overhauling or rebuilding of transportation equipment (i.e., periodic restoration of transportation equipment to original design specifications) or transportation equipment conversion (i.e., major modification to systems). An establishment that primarily performs factory (or shipyard) overhauls, rebuilding, or conversions of aircraft, railroad rolling stock, or ships is classified in Subsector 336, Transportation Equipment Manufacturing, according to the type of equipment.

Many of the establishments in this sector often operate on networks, with physical facilities, labor forces, and equipment spread over an extensive geographic area.

Warehousing establishments in this sector are distinguished from merchant wholesaling in that the warehouse establishments do not sell the goods.

Excluded from this sector are establishments primarily engaged in providing travel agent services that support transportation and other establishments, such as hotels, businesses, and government agencies. These establishments are classified in Sector 56, Administrative and Support and Waste Management and Remediation Services. Also, establishments primarily engaged in providing rental and leasing of transportation equipment without operator are classified in Subsector 532, Rental and Leasing Services.

NAICS Canada 2012 48-49 Transportation and warehousing^T

This sector comprises establishments primarily engaged in transporting passengers and goods, warehousing and storing goods, and providing services to these establishments. The modes of transportation are road (trucking, transit and ground passenger), rail, water, air and pipeline.

These are further subdivided according to the way in which businesses in each mode organize their establishments. National post office and courier establishments, which also transport goods, are included in this sector. Warehousing and storage establishments are subdivided according to the type of service and facility that is operated.

Many of the establishments in this sector are structured as networks, with activities, workers, and physical facilities distributed over an extensive geographic area.

What are the links for the official NAICS of each country?

Classifications of each country can be found in detail through the following links:

NAICS Canada

NAICS United States

NAICS Mexico

The three NAICS classifications in one website