North American Industry Classification System

LMIC utilizes the North American Industry Classification System (NAICS) to ensure consistent and accurate tabulation of employment and wage data by industry. NAICS is the standard industry classification system used by sister agencies in all other states and by the national government for comparable workforce data by industry.

NAICS uses a production-oriented conceptual framework to group establishments into industries based on the activity in which they are primarily engaged. Establishments using similar raw material inputs, similar capital equipment and similar labor are classified in the same industry. In other words, establishments that do similar things in similar ways are classified together. NAICS provides a tool to ensure economic statistics reflect the changing economy.

NAICS categorizes businesses into one of 20 sectors. Each sector is represented by a two-digit NAICS code. For example, the two-digit code 72 represents Accommodation and Food Services. Businesses are then classified into more specific categories within a sector, represented by codes up to six digits. The more digits a code has, the more specific the business activity. The fifth and sixth digits represent industries at the international (United States, Canada and Mexico) and national level. The table below identifies the terminology used for each NAICS digit level.

NAICS Hierarchy	Number of Digits	Example
Sector	2	72 - Accommodation and Food Services
Subsector	3	722 - Food Services and Drinking Places
Industry Group	4	7223 - Special Food Services
International Industry	5	72232 - Caterers
U.S. National Industry	6	722320 - Caterers

In addition, the U.S. Bureau of Labor Statistics grouped the 20 two-digit NAICS sectors into broader categories to form 11 supersectors for analysis purposes only. In the above table, the Accommodation and Food Services sector would be part of the Leisure and Hospitality supersector (along with the Arts, Entertainment and Recreation sector).

The industry level at which workforce data is published is determined to some degree by the amount of data available at each level. For example, at the national level, the Quarterly Census of Employment and Wages (QCEW) program publishes employment and wage data for nearly every NAICS industry. At the state and area level, the QCEW program publishes employment and wage data down to the most detailed NAICS industry level possible, if disclosure restrictions are met. In accordance with BLS policy, data are not published for any industry level when necessary to protect the identity of cooperating employers.