What is the purpose of NAICS?

What is the purpose of NAICS?

• A. Classifying industries for statistical purposes
• B. Setting building codes
• C. Determining tax rates
• D. Regulating trade

Answer: (A)

NAICS is used to organize businesses into standardized industry categories so statistical agencies can collect, compare, and publish data about the economy. By assigning firms to the same industry codes, governments and researchers track employment, output, wages, and trends across sectors and over time, and can also compare data across North American countries that use NAICS. It isn’t about building codes, tax rates, or regulating trade—the latter come from separate codes and policies. NAICS codes are hierarchical, allowing data to be analyzed at different levels—from broad sectors to specific industries.

NAICS is used to organize businesses into standardized industry categories so statistical agencies can collect, compare, and publish data about the economy. By assigning firms to the same industry codes, governments and researchers track employment, output, wages, and trends across sectors and over time, and can also compare data across North American countries that use NAICS. It isn’t about building codes, tax rates, or regulating trade—the latter come from separate codes and policies. NAICS codes are hierarchical, allowing data to be analyzed at different levels—from broad sectors to specific industries.