Quick Insight
NAICS, short for the North American Industry Classification System, is a standardized coding system used to classify businesses and organizations by their primary economic activity. NAICS codes range from broad industry sectors to more specific business activities, such as full-service restaurants or grocery stores. The system is used across the United States, Canada, and Mexico to organize and compare economic data.
Why NAICS Codes Matter
- They provide a common, standardized way to classify and compare businesses across datasets and industries.
- They are widely used by government agencies, researchers, and analysts as a baseline classification system.
- They give each business a consistent starting category, making them useful for broad industry-level analysis.
- They help researchers and businesses organize data and analyze industries consistently.
The honest limit: NAICS codes were designed for industry classification and economic reporting, so they can be too broad for some location data use cases. A code such as “Offices of All Other Miscellaneous Health Practitioners” may not capture the specific type of business or place in enough detail.
Types of NAICS Codes
NAICS uses a hierarchical structure. Each additional digit makes the classification more specific.
- 2-digit codes: The broadest industry sector, such as Retail Trade.
- 3-digit codes: A subsector within the broader industry sector.
- 4-digit codes: An industry group within the subsector.
- 5-digit codes: A more specific industry classification.
- 6-digit codes: The most specific NAICS industry classification.
Want to see how category tags add more detail on top of NAICS codes?
Read our post: Introducing Expanded SafeGraph Category Tags: More Granular Than NAICS Codes
Frequently Asked Questions
1. What does NAICS stand for?
NAICS stands for the North American Industry Classification System. It is a standardized system for classifying businesses and economic activities across the United States, Canada, and Mexico.
2. How many digits does a NAICS code have?
A NAICS code can have up to six digits. The first two digits identify the broad industry sector, and each additional digit narrows the classification to a more specific type of economic activity.
3. What's the difference between a NAICS code and a category tag?
A NAICS code provides a standardized industry classification based on a business’s primary economic activity. Category tags can add multiple, more specific labels that describe what a business or point of interest is.
4. Can a business have more than one NAICS code?
A business is generally classified according to its primary economic activity, although additional classifications may be used in some contexts when a business operates across multiple types of activities.
5. Who uses NAICS codes?
Government agencies use NAICS codes to organize and report economic data. Businesses, researchers, and analysts also use them to classify, compare, and analyze industries.
