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2022 Wyoming Workforce Annual Report

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Wyoming Labor Force Trends

January 2023 | Volume 60, No. 1

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North American Industry Classification System Code Changes

Article | Tables and Figures

by: Tiffany Horn, Survey Technician

Changes are made to the North American Industry Classification System (NAICS) every five years in order to keep the classifications relevant to changing industries. The most recent changes took effect on January 1, 2022. The related articles in this issue of Wyoming Labor Force Trends include these changes.

The purpose of the NAICS coding structure is to classify businesses in order to collect, analyze, and publish statistical data. NAICS was developed to classify units according to their production function. These codes are used by all industries in North America, including the United States, Canada, and Mexico. Since all three countries use the same codes, each country is able to publish statistical data regularly, and NAICS provides industry comparability and maintains compatibility.

The NAICS structure offers five levels of detail by using a two- to six-digit classification system. An illustration of the NAICS structure is available in Box 1 in a related article. Each digit narrows the category and more digits in the code signify greater detail. The first two digits signify the economic sector, the third denotes the subsector, the fourth indicates the industry group, the fifth represents the NAICS industry, and the sixth digit denotes the national industry.

This article focuses on changes to the retail trade sector, which is given the NAICS code 44-45. A great deal of contraction and expansion occurred in retail trade over the last decade, and updates to NAICS codes from 2017 to 2022 reflect those trends.

The most notable change was to the NAICS 2017 code 454110, electronic shopping and mail-order houses. That code has been expanded into every retail code from 441 through 459. In other words, the industry of electronic retailers and catalog shopping was eliminated and absorbed by other NAICS codes. For example, if a shopper is seeking motorcycle parts from an electronic retailer, they will purchase those from a business assigned the NAICS 2022 code 441330, automotive parts & accessories retailers.

Other examples of 2017 NAICS codes that were eliminated in 2022 include non-store retailers such as vending machine operators (454210), fuel dealers (454310), and other direct selling establishments (454390).

Table 1 illustrates how six older NAICS codes for clothing stores were combined into one. The 2017 NAICS codes 44810, 448120, 448130, 448140, and 448150, and 448190 were combined to the 2022 NAICS code 451880, clothing & clothing accessories retailers. In second quarter 2022 (2022Q2), there were 152 employers (units) with an average monthly employment of 1,124 in this new NAICS code in Wyoming.

Terminology also has changed with the NAICS 2022 retail codes, as establishments are now referred to as retailers instead of stores in order to account for electronic retailer services, which may not be exclusively brick and mortar stores. The lone exception was department stores, which changed NAICS codes from 452210 to 455110.

The NAICS changes eliminated three subsectors (three-digit), condensing the total from 12 to nine (see Table 2 and Table 3). The subsectors that were eliminated were furniture & home furnishing stores (442), electronics & appliance stores (443), and non-store retailers (454). As shown in Table 2, non-store retailers accounted for 2.3% (684 jobs) of Wyoming’s retail trade sector in 2017Q2. These jobs are no longer in a subsector of their own and have been moved into other retail trade subsectors.