NAICS (pronounced Nakes) was developed by the U.S Office of Management and Budget to be used by Federal statistical agencies in classifying business establishments for the collection, analysis, and publication of statistical data related to the business economy of the U.S. NAICS replaced old Standard Industrial Classification (SIC) system. It was also developed in cooperation with the statistical agencies of Canada and Mexico to establish a 3-country standard that allows for a high level of comparability in business statistics among the three countries. NAICS is the first economic classification system to be constructed based on a single economic concept.
What is an Establishment?
An establishment is generally a business or industrial unit at a single, physical location that produces or distributes goods or performs services (e.g., store, factory, farm, etc.). An enterprise, on the other hand, may consist of more than one location performing the same or different types of economic activities. Each establishment of that enterprise is assigned a NAICS code based on its own primary activity.