A NAICS code (North American Industry Classification System code) is a six- digit number used to classify businesses by their type of economic activity. It standardizes industry classification across the United States, Canada, and Mexico to facilitate the collection, analysis, and publication of economic data by federal statistical agencies

. The structure of a NAICS code is hierarchical:

• The first two digits designate the economic sector.
• The third digit represents the subsector.
• The fourth digit indicates the industry group.
• The fifth digit specifies the NAICS industry.
• The sixth digit defines the national industry, providing the most detailed classification

NAICS codes are essential for:

• Statistical reporting and economic analysis.
• Government contracting and regulatory compliance.
• Market research and business planning.
• Accessing tax incentives and understanding industry trends

The system replaced the older Standard Industrial Classification (SIC) system in 1997 and is maintained collaboratively by the U.S., Canada, and Mexico to ensure comparability of business data across North America

. In summary, a NAICS code uniquely identifies a business's primary industry to support standardized data collection and analysis across North America.