Statistical Classification of Economic Activities in the European Community (NACE)

The Statistical Classification of Economic Activities in the European Community (NACE) developed by Eurostat is a standardized framework used to classify economic activities within the European Union (EU). The term NACE comes from the French title: Nomenclature statistique des Activités économiques dans la Communauté Européenne. The classification system is hierarchical, with four levels ranging from broad sectors to specific activities, covering all areas of the economy.

Structure

In the latest version of NACE (NACE Rev 2.1), published in June 2022 (and expected to be applied by the statistical offices of all EU member countries from 1 January 2025), economic activities are categorized into:

22 sections (identified by the English alphabets A to U)
87 divisions (identified by two-digit numerical codes, 01 to 99)
287 groups (identified by three-digit numerical codes, 01.1 to 99.0)
651 classes (identified by four-digit numerical codes, 01.11 to 99.00)

The NACE classification system is structured hierarchically, with four levels of detail. The first level (identified by a single letter) categorizes economic activities into sections. For example, section "A" covers "Agriculture, Forestry, and Fishing" while Section "C" covers "Manufacturing". The second level (identified by a two-digit code) further divides the above sections into more specific divisions, such as "02" for "Forestry and Logging" and "10" for "Manufacture of Food Products".

The third level (identified by a three-digit code) refines these divisions into groups, and the fourth level (identified by a four-digit code) represents the most detailed classification, known as classes, which describe specific economic activities. For example, under section C, division 10, group 10.1 refers to “processing and preserving of meat and production of meat products”, and class 10.11 specifies “processing and preserving of meat, except of poultry meat”.

The table below shows the number of divisions, groups, and classes in each of the 22 sections of NACE.

Section	Title	Divisions	Groups	Classes
A	Agriculture, fishing and forestry	3	14	39
B	Mining and quarrying	5	10	15
C	Manufacturing	24	92	232
D	Electricity, gas, steam, and air conditioning supply	1	4	12
E	Water supply, sewerage, waste management and remediation activities	4	6	11
F	Construction	3	11	26
G	Wholesale and retail trade	2	18	83
H	Transportation and storage	5	17	30
I	Accommodation and food service activities	2	9	11
J	Publishing, broadcasting and content production and distribution activities	3	7	15
K	Telecommunication, computer programming, consulting, computing infrastructure and other information service activities	3	8	9
L	Financial and insurance activities	3	10	20
M	Real estate activities	1	3	5
N	Professional, scientific and technical activities	7	16	22
O	Administrative and support service activities	6	18	32
P	Public administration and defense; compulsory social security	1	3	9
Q	Education	1	6	12
R	Human health and social work activities	3	9	20
S	Arts, sports and recreation	4	10	20
T	Other service activities	3	12	24
U	Activities of households as employers, and undifferentiated goods and service-producing activities of households for own use	2	3	3

History & Versions

The NACE system originated in the 1970s when the European Community (now known as the European Union) recognized the need for a standardized classification system to facilitate the comparison and analysis of economic data across member states. The initial classification was inspired by similar systems already in use, such as the International Standard Industrial Classification (ISIC) developed by the United Nations. Since its first release, there have been four revisions of NACE as follows:

NACE Rev. 1 (1990): The original system was updated and replaced by NACE Rev. 1 in 1990. This revision aimed to better reflect the changing structure of the European economy and improve comparability with other international classification systems like ISIC.
NACE Rev. 1.1 (2002): A minor update, known as NACE Rev. 1.1, was introduced in 2002. This revision made adjustments to certain categories to address new economic activities and better align with international standards.
NACE Rev. 2 (2008): A more significant update came with NACE Rev. 2, which was adopted in 2006 and implemented in 2008. This revision involved a major restructuring of the classification system to reflect economic developments, such as the rise of information technology, and to improve international comparability.
NACE Rev. 2.1 (2022): This is the current version of NACE expected to be applied by the statistical offices of all EU member countries from 1 January 2025. Considering the changes in economic activities since the last revision in 2008, a revised version of NACE Rev. 2 has been developed. It introduces new concepts at all classification levels and renames some of the headings in NACE Rev.2. However, efforts have been made to preserve the classification's structure in all areas that do not explicitly need modification due to new concepts.

The table below summarizes the classification structure of the current and previous versions of NACE. Compared to sections, divisions, and groups, the number of classes has increased the most over the years, from 503 classes in the oldest version (NACE Rev. 1) to 651 classes in the current version (NACE Rev. 2.1).

	NACE Rev. 1	NACE Rev. 1.1	NACE Rev. 2	NACE Rev. 2.1
Sections	17	17	21	22
Divisions	60	62	88	87
Groups	222	224	272	287
Classes	503	514	615	651

Where is it used?

The NACE classification system is widely used across various sectors and applications within the European Union and beyond. Key areas include:

Statistical Analysis: NACE is primarily used for collecting, analyzing, and presenting statistical data related to economic activities in EU member states. This includes national accounts, employment statistics, industrial production, and other economic indicators.
Business Registers: National statistical offices use NACE codes to categorize businesses in official registers. This classification helps in organizing and maintaining accurate records of businesses based on their primary economic activities.
Economic Policy and Planning: Policymakers use NACE to assess economic performance, identify trends, and develop targeted economic policies. The classification helps in making comparisons between different sectors and regions within the EU.
Regulation and Compliance: NACE codes are often used in EU regulations to define the scope of certain policies, such as eligibility for funding programs, tax incentives, and compliance with specific standards.
Trade and Market Analysis: Businesses and analysts use NACE classifications to understand market structures, conduct competitor analysis, and identify opportunities within specific sectors.
Research and Academia: Researchers and academics use NACE data in economic studies, enabling cross-country comparisons and sectoral analyses within the EU.

Further resources

Download NACE

Current Version: NACE Rev. 2.1
Older Versions: NACE Rev. 2; NACE Rev. 1.1; NACE Rev. 1