<P> The North American Industry Classification System or NAICS (pronounced "nakes") is used by business and government to classify business establishments according to type of economic activity (process of production) in Canada, Mexico, and the United States of America . It has largely replaced the older Standard Industrial Classification (SIC) system; however, certain government departments and agencies, such as the U.S. Securities and Exchange Commission (SEC), still use the SIC codes . </P> <P> An establishment is typically a single physical location, though administratively distinct operations at a single location may be treated as distinct establishments . Each establishment is classified to an industry according to the primary business activity taking place there . NAICS does not offer guidance on the classification of enterprises (companies) which are composed of multiple establishments . </P>

What is the purpose of the naics classification system