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Adoption of NAICS

With the September 2001 release, the 1997 North American Industry Classification System (NAICS-1997) replaces the 1980 Standard Industrial Classification (SIC-1980). NAICS is an industry classification system developed by the statistical agencies of Canada, Mexico and the United States. Created against the background of the North American Free Trade Agreement, it was designed to provide common definitions of the industrial structure of the three countries and a common statistical framework to facilitate the analysis of the three economies. The adoption of a common system ensures that statistical agencies in the three countries can produce information on inputs and outputs, industrial performance, productivity, unit labour costs, employment, and other statistics that reflect structural changes occurring in the three economies.

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NAICS is based on a production-oriented or supply-based conceptual framework. This means that producing establishments are grouped into industries according to similarity in the production processes (i.e., the similarity of input structures, labour skills, etc.) used to produce goods and services. This is a marked departure from previous classifications systems, where the guiding principle in delineating industry boundaries was the commodity itself (i.e., establishments were grouped together based on which commodities they produced or, alternately, the end use to which they were put). For example, under the SIC-1980, manufacturing of motor vehicle plastic parts (SIC 3256) was a subdivision of motor vehicle parts production (SIC 325), because of similarity of product/end use. However, under NAICS-1997, Motor Vehicle Plastic Parts Manufacturing (NAICS 326193) has been classified under Plastic Product Manufacturing (NAICS 3261), reflecting the shared similarity of production process, which involves the extensive use of compression, extrusion and injection moulding techniques.

The numbering system that has been adopted is a six-digit code, of which the first five digits are used to describe the NAICS levels that will be used by the three countries to produce comparable data. The first two digits designate the sector, the third digit designates the subsector, the fourth digit designates the industry group and the fifth digit designates industries. The sixth digit is used to designate national industries. The Canadian version of NAICS consists of 20 sectors, 99 subsectors, 321 industry groups, 734 industries and 921 national industries. The 20 sectors are listed below.

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The Canadian System of National Accounts only publishes 19 of these sectors. The twentieth, Sector 55 (Management of Companies and Enterprises) has, for reasons of historical continuity and data quality, been grouped together with Sectors 52 and 53 into an aggregate called Finance, Insurance and Real Estate.

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Special attention was given in NAICS to developing classifications for new and emerging industries, services industries in general, and industries engaged in the production of advanced technologies. As much as possible, time series continuity was maintained. However, owing to fundamental changes in the economy, to the classification's strong production orientation and to proposals from data users, this has not always been possible.

Acrobat (PDF) file of industry classes with their NAICS and Input-Output equivalents that will be published by the Industry Measures and Analysis Division for GDP by industry purposes, on September 28, 2001.