NAICS (most commonly pronounced as “nakes”) is an industry classification system developed by the statistical agencies of the U.S., Canada and Mexico, respectively the United States Office of Management and Budget, Statistics Canada and Instituto Nacional de Estadística, Geografía e Informática of Mexico.

Why these three countries? NAICS was created within the context of the North American Free Trade Agreement and is designed to be a common statistical framework to facilitate the analysis of the three economies and provide common definitions of the industrial structure of the three countries.

NAICS is the standard used by all Federal statistical agencies in classifying business establishments for the purpose of collecting, analyzing, and publishing statistical data related to the U.S. business economy. It was adopted in 1997 to replace the Standard Industrial Classification (SIC) system.

(SIC codes, created in 1937, was the first and somewhat entrenched industrial classification system used in the U.S. While NAICS is the official industrial classification system used by Federal agencies, SIC still has a strong hold across the general business world and even within certain government entities. For example, large national providers of business information on companies will most often have both a SIC and a NAICS code for a given business but many may still only display an SIC code.) Read the rest of this entry »