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What is the NAICS? How is its structure?

Inegi answers several questions related to the North American Industrial Classification System (NAICS), as follows:

What is the NAICS?

This system is the unique economic activity classifier for the North American region. It contains categories (economic activities classified at any level of grouping) agreed trilaterally by Canada, United States and Mexico, and others of national detail.

To build the NAICS, the three countries carried out a large amount of research that resulted in an updated classification system, with greater coverage of economic activities and based on a single criterion that homogenizes the way it is grouped.

What does the word industrial mean in the context of this system?

It refers not only to transformation activities, but to all economic activities, from agriculture to service activities.

What is economic activity?

It is the set of actions carried out by an economic unit to produce or provide goods and services.

What are economic units?

They are the entities that produce goods and services, call them establishments, households, natural persons.

What do the initials u.e.d.p stand for?

They mean mainly dedicated economic units.

Is there a single NAICS for the three North American countries?

There is no single version that encompasses the NAICS of the three countries, as each one has its own national version. The design of the NAICS structure considers a common part between Canada, the United States and Mexico, and a specific, national part, prepared by each of the countries. The resulting national classifiers are called NAICS Canada, NAICS United States, and SCIAN Mexico.

How is it structured?

It is made up of 20 sectors of activity. Its hierarchical structure is made up of five levels of aggregation: sector (the most aggregated level, identified with two digits, with the exception of sectors 31-33 and 48-49 that are identified with two two-digit figures), subsector (identified with three digits), branch (identified with four digits), sub-branch (identified with five digits) and class of activity (the most disaggregated level, identified with six digits).

Why were figures of more than two digits used for the coding of some sectors?

Sectors 31-33 and 48-49 are coded with two two-digit figures for the number of subsectors that are disaggregated from them, that is, 21 subsectors are disaggregated from sector 31-33, if the sector code 31 would have been It could be disaggregated into 9 subsectors, if codes 31-32 had been taken as a sector they would be disaggregated into 18 subsectors, but it was necessary to disaggregate into 21, therefore codes 31-33 had to be used. In the case of sector 48-49, 11 subsectors needed to be disaggregated and the same logic was followed as for sector 31-33.

What should we understand by trilateral agreement in the context of NAICS?

It is the agreement signed by the three countries that built the classifier, this implies the level of the NAICS (sector, subsector, branch or sub-branch) that is comparable between the three nations, that is, the three countries are in the same understanding about the content and scope of the categories, which rules their disaggregation.

Why weren’t all agreements established at the subbranch level?

Most of the trilateral agreements were established at the sub-branch level, but due to the different forms of organization of the economic units, different legislation, divergent interests to agree on unbundling, resource and time limitations, some agreements between the three countries settled at more aggregate levels.

How to identify in the publication of the system the categories that are agreed trilaterally?

In this new 2018 version, the categories that have the abbreviation ‘T’ together refer to trilaterally agreed categories, while the categories that are not accompanied by said letter are exclusive categories in Mexico.

What are the strengths?

It is the first purpose-built classifier of economic activities for North America. It was formed as a result of an agreement between the three countries and reflects the economic structure of the region. In the system, for example, it is classified from the elaboration of pulque to the manufacture of spaceships.

It is periodically reviewed and fine-tuned to respond to structural changes in the economy and user demands. There is the original 1997 version and four updates, 2002, 2007, 2013 and 2018. Each new version replaces the previous one.

The statistics compiled are comparable with those generated based on the United Nations International Standard Industrial Classification of all economic activities.

 

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