What is a NAICS Code?
NAICS is an acronym for the North American Industry Classification System created in 1997 by the United States, Canada, and Mexico. NAICS replaced the Standard Industry Classification system (SIC Codes) enacted in 1937. NAICS Codes are used to classify companies into specific industries and are used for standardized statistical analyses of businesses in North America.
Why a NAICS Code is Important?
A NAICS Code provides a standardized classification of industries for the United States, Canada, and Mexico. This ensures that statistical reporting and analysis is uniform across geographies. For example, the same NAICS code is used for the manufacturing industry, allowing for a standardized analysis of manufacturing across North America.
Organizations can generally get the same benefit from analyzing either a NAICS code or SIC Code. Analyses using these codes are performed by many different types of organizations. Retailers often analyze new sites or catchments based on the industry landscape of an area. If an area they are considering expanding into already has many retailers, it could indicate that the market is oversaturated, or that retailers tend to succeed there.
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Similarly, real estate firms may use a NAICS code and SIC codes to better understand an area they are considering investing in. If a business next door to a potential investment property is classified as an industry not compatible with the investment under consideration, it could impact the firm’s decision. By understanding which industries are active in a particular location, real estate companies can make smarter decisions about their portfolios.
The public sector also uses a NAICS code and SIC Codes in their analyses. Government agencies analyze locations by NAICS and SIC Codes to inform budget planning, resource allocation, and zoning. Having standardized codes across geographies, whether domestic or international, simplifies the methodology and increases the accuracy of results.
NAICS and SIC Codes are commonly used in geospatial analysis. Precisely offers multiple datasets containing NAICS and SIC Codes that enable clients to analyze industries in different locations.
How Precisely Can Help
Precisely Points of Interest datasets provide accurate location and company information for businesses, leisure, and geographic features around the world. These geographic points are appended with NAICS and SIC Codes to indicate which standard industry they belong to. This allows address-level analysis of the business landscape for highly granular analytics.
Precisely Demographics datasets also include a NAICS code and SIC Codes, aggregated to standard census geographies. These polygonal datasets provide detailed information about the concentration of industries in specific areas and are useful when analyzing geographic trends and patterns.