What is a NAICS code? The North American Industry Classification System explained

What is NAICS?

NAICS (pronounced “nakes”) is the industry classification that North American statistical agencies use to collect, analyse and publish data about the business economy. It groups establishments — a factory, store, office or other single business location — into industries according to the similarity of the processes they use to produce goods or services. Each establishment is classified by its primary business activity, which is generally the activity that generates the most revenue.

Where NAICS comes from

NAICS was developed under the guidance of the US Office of Management and Budget together with Statistics Canada and Mexico’s INEGI, and it was adopted in 1997 to replace the Standard Industrial Classification (SIC) system. It is reviewed every five years to keep pace with the economy: the current edition is NAICS 2022, which defines 1,012 US industries, and updates have already been proposed for 2027. The US Census Bureau publishes the official code lists and reference files linked below.

• Official NAICS page — US Census Bureau
• 2022 NAICS Manual — PDF
• SBA size standards by NAICS code

How to read a NAICS code

NAICS is a hierarchical system of 2- to 6-digit codes with five levels of detail. Each additional digit narrows the classification, so codes that share their first digits belong to the same branch of the economy. A complete and valid NAICS code has six digits.

• The first two digits identify the sector. There are 20 sectors, and some span a range of codes, such as 31-33 Manufacturing.
• The third digit identifies the subsector.
• The fourth digit identifies the industry group.
• The fifth digit identifies the NAICS industry.
• The sixth digit identifies the national industry.

The five-digit level is comparable across the United States, Canada and Mexico, while the sixth digit lets each country add its own national detail. A code with more than six digits is not an official NAICS code but a NAICS-based code created by a specific agency.

For example, custom software development is classified under code 541511:

• 54 — Professional, Scientific, and Technical Services (sector)
• 541 — Professional, Scientific, and Technical Services (subsector)
• 5415 — Computer Systems Design and Related Services (industry group)
• 54151 — Computer Systems Design and Related Services (NAICS industry)
• 541511 — Custom Computer Programming Services (national industry)

How NAICS codes are used in public procurement

Although NAICS was designed for statistics, many contracting authorities use it to describe what they buy and who can bid. In the United States, suppliers list their NAICS codes when they register in SAM.gov to become federal contractors, and each federal solicitation is assigned a single NAICS code. The Small Business Administration links its size standards to NAICS codes, which determines whether a company qualifies for small business set-asides.

How to find the right NAICS code for your business

There is no central register that assigns NAICS codes, so businesses usually select their own codes when they register with an agency or a procurement portal. Follow these steps to choose them:

1. Identify your primary business activity — the goods or services that generate most of your revenue.
2. Search the NAICS explorer below by keyword or code, and expand the matching sectors to compare related industries.
3. Read the official definition of the six-digit code on the US Census Bureau website to confirm it describes what you do.
4. Use the same codes consistently in your registrations and supplier profiles, and add secondary codes for the other activities you bid for.

NAICS 2022 code explorer

Browse more than 2,100 codes of the NAICS 2022 structure, from the 20 sectors down to the 1,012 national industries, or search by keyword or code.

NAICS vs CPV codes

NAICS classifies businesses by the industry they operate in, while the Common Procurement Vocabulary (CPV) classifies the subject of a public contract — the supplies, works or services being bought. CPV codes are used across European public procurement and NAICS is used in North America, so suppliers bidding internationally often need both.

Learn how CPV codes work in our guide to CPV codes, or use the CPV to NAICS converter to find the NAICS equivalents of a CPV code.