Appendix 2: How are industries defined?

The North American Industrial Classification System (NAICS)

The classification system that's used by both Canada and the US is called the North American Industrial Classification System, or NAICS. The guidelines for classifying industries under NAICS were finalized in 1997 and some modifications (mainly to the classification of broadcasting & telecommunications) were made in 2002.

NAICS is the system that's used to allocate an establishment [1] to a particular industry. All types of industries are included in NAICS, and the classification system is periodically revised and its definitions updated to capture changes in economic activity. For example, the classification system must be revised when new industries emerge, or the nature of the work that's done by an industry changes significantly.

Each establishment is classified to a single industry based on what its main activity is. For example, offices of architects are included in the professional, scientific & technical services industry. However, if a construction company has an architect on staff who produces blueprints that are sold to other construction companies, the value of the architect's work would be included in the output of the construction industry That's because the major activity of the establishment in question is construction, not professional, scientific & technical services.

NAICS is hierarchical, with industries classified into broad groupings which are then broken down into sub-categories. The number of digits in a NAICS code indicates the level of disaggregation: two-digit codes are for broader groupings of industries than three-digit codes, and so on. A brief summary of the definitions for the industry groups used in this document follows.

11	Agriculture, forestry, fishing & hunting Agriculture
		111	Crop production
		112	Animal production
		1151	Support activities for crop production
		1152	Support activities for animal production
	Forestry & logging:
		113	Forestry & logging
		1153	Support activities for forestry & logging
	114	Fishing, hunting & trapping
21	Mining & oil & gas extraction
23	Construction
31-33	Manufacturing
41	Wholesale trade
44-45	Retail trade
48-49	Transportation & warehousing
Information, culture & recreation
51	Information & cultural industries
71	Arts, entertainment & recreation
Finance, insurance, real estate & leasing
52	Finance & insurance
53	Real estate & rental & leasing
54	Professional, scientific & technical services
Business, building & other support services
55	Management of companies & enterprises
56	Administration, support, waste management & remediation services
61	Educational services
62	Health care & social assistance
72	Accommodation & food services
81	Other services
91	Public administration

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[1] An establishment is the smallest operating entity for which financial statistics are reported.