New NAICS Codes 2022: What you need to know
By: Kiyon Brandford
Did you know that every 5 years NAICS codes undergo a review for potential revisions? The last revision happened in Fiscal Year 2017 which means new NAICS code revisions have been released for Fiscal Year 2022. The development and maintenance of NAICS codes is a collaborative effort between the Instituto Nacional de Estadistica y Geografia in Mexico, Statistics Canada, and the US Office of Management and Budget to describe economic activity across North America. The goal of this collaboration was to create a common set of industry definitions for Mexico, Canada, and the United States so that economic analyses can be conducted across the economies of the three North American countries. The Economic Classification Policy Committee (ECPC) oversees developing recommendations and considering feedback for changes to the NAICS system. After considering proposals from the public, the ECPC submits recommendations to OMB who make the final decision for revisions.
The 2022 NAICS code update focused primarily on the changing nature of how we do business in today’s economy. In its submission to the Federal Register about the changes to NAICS codes in 2022, the Office of Management and Budget says, “…the internet has developed from a specialized activity to a generic method of delivery for goods and services. Therefore, the 2022 revisions to NAICS reflect a deemphasis on the delivery method as an industry function used in NAICS classification.”1 The changes to NAICS codes reduced the number of codes from 1,057 in 2017 to 1,012 in 2022. A number of changes were made like in Sector 42 – Wholesale Trade where two codes (424320 – Men’s and Boys’ Clothing and Furnishings Merchant Wholesalers and 424330 – Women’s, Children’s, and Infants’ Clothing and Accessories Merchant Wholesalers) were combined to create a new 6-digit industry 424350 – Clothing and Clothing Accessories Merchant Wholesalers. For more information about the 2022 NAICS code changes click here.
In TargetGov’s FAST® Process we analyze our clients’ current NAICS codes nationwide and in their place of performance. We also make evidence-based recommendations for additional NAICS codes that they should consider adding to their corporate SAM profile. For more information about the FAST® Process, contact our office at 410-579-1346.