The Sector as a Whole
The Manufacturing sector comprises establishments engaged in the mechanical, physical, or chemical transformation of materials, substances, or components into new products. The assembling of component parts of manufactured products is considered manufacturing, except in cases where the activity is appropriately classified in Sector 23, Construction.
Establishments in the Manufacturing sector are often described as plants, factories, or mills and characteristically use power-driven machines and materials-handling equipment. However, establishments that transform materials or substances into new products by hand or in the worker's home and those engaged in selling to the general public products made on the same premises from which they are sold, such as bakeries, candy stores, and custom tailors, may also be included in this sector. Manufacturing establishments may process materials or may contract with other establishments to process their materials for them. Both types of establishments are included in manufacturing.
The materials, substances, or components transformed by manufacturing establishments are raw materials that are products of agriculture, forestry, fishing, mining, or quarrying as well as products of other manufacturing establishments. The materials used may be purchased directly from producers, obtained through customary trade channels, or secured without recourse to the market by transferring the product from one establishment to another, under the same ownership.
The new product of a manufacturing establishment may be finished in the sense that it is ready for utilization or consumption, or it may be semifinished to become an input for an establishment engaged in further manufacturing. For example, the product of the alumina refinery is the input used in the primary production of aluminum; primary aluminum is the input to an aluminum wire drawing plant; and aluminum wire is the input for a fabricated wire product manufacturing establishment.
The subsectors in the Manufacturing sector generally reflect distinct production processes related to material inputs, production equipment, and employee skills. In the machinery area, where assembling is a key activity, parts and accessories for manufactured products are classified in the industry of the finished manufactured item when they are made for separate sale. For example, a replacement refrigerator door would be classified with refrigerators and an attachment for a piece of metal working machinery would be classified with metal working machinery. However, components, input from other manufacturing establishments, are classified based on the production function of the component manufacturer. For example, electronic components are classified in Subsector 334, Computer and Electronic Product Manufacturing and stampings are classified in Subsector 332, Fabricated Metal Product Manufacturing.
Manufacturing establishments often perform one or more activities that are classified outside the Manufacturing sector of NAICS. For instance, almost all manufacturing has some captive research and development or administrative operations, such as accounting, payroll, or management. These captive services are treated the same as captive manufacturing activities. When the services are provided by separate establishments, they are classified to the NAICS sector where such services are primary, not in manufacturing.
The boundaries of manufacturing and the other sectors of the classification system can be somewhat blurry. The establishments in the manufacturing sector are engaged in the transformation of materials into new products. Their output is a new product. However, the definition of what constitutes a new product can be somewhat subjective. As clarification, the following activities are considered manufacturing in NAICS:
Milk bottling and pasteurizing; Grinding of lenses to prescription;
Water bottling and processing; Wood preserving;
Fresh fish packaging (oyster shucking, Electroplating, plating, metal heat
fish filleting); treating, and polishing for the trade;
Apparel jobbing (assigning of materials Lapidary work for the trade;
to contract factories or shops for Fabricating signs and advertising displays;
fabrication or other contract operations) Rebuilding or remanufacturing
as well as contracting on materials owned by others; machinery (i.e., automotive parts)
Printing and related activities; Ship repair and renovation;
Ready-mixed concrete production; Machine shops; and
Leather converting; Tire retreading.
Conversely, there are activities that are sometimes considered manufacturing, but which for NAICS are classified in another sector (i.e., not classified as manufacturing). They include:
1. Logging, classified in Sector 11, Agriculture, Forestry, Fishing and Hunting is considered a harvesting operation;
2. The beneficiating of ores and other minerals, classified in Sector 21, Mining, is considered part of the activity of mining;
3. The construction of structures and fabricating operations performed at the site of construction by contractors, is classified in Sector 23, Construction;
4. Establishments engaged in breaking of bulk and redistribution in smaller lots, including packaging, repackaging, or bottling products, such as liquors or chemicals; the customized assembly of computers; sorting of scrap; mixing paints to customer order; and cutting metals to customer order, classified in Sector 42, Wholesale Trade or Sector 44-45, Retail Trade, produce a modified version of the same product, not a new product; and
5. Publishing and the combined activity of publishing and printing, classified in Sector 51, Information, perform the transformation of information into a product where as the value of the product to the consumer lies in the information content, not in the format in which it is distributed (i.e., the book or software diskette).
The manufacturing sector, classified under NAICS 31-33, is currently experiencing a transformational phase driven primarily by digital innovation, sustainability concerns, and supply chain reconfiguration. One prominent trend is the increasing adoption of Industry 4.0 technologies, such as the Internet of Things (IoT), Artificial Intelligence (AI), and robotics. These technologies are enabling manufacturers to increase efficiency, reduce costs, and improve product quality through enhanced data analytics and automation.
Sustainability has become a critical focus, with manufacturers striving to reduce their carbon footprint and adopt circular economy principles. This includes investing in energy-efficient processes and materials, as well as rethinking product lifecycle management to minimize waste and optimize resource use. In response to consumer and regulatory pressures, sustainability practices are not only enhancing brand reputation but also driving operational efficiencies.
The COVID-19 pandemic has exposed vulnerabilities in global supply chains, leading businesses to multilayer and diversify their supply bases to enhance resilience. Nearshoring and reshoring trends are gaining traction as manufacturers seek to reduce dependency on distant suppliers and improve control over their supply chains. Additionally, there is growing interest in agile production strategies that enable rapid adaptation to changing market demands.
Looking ahead, manufacturers will likely continue to explore smart manufacturing options to remain competitive. Investment in skilled workforce development will be crucial, as advanced technologies require a shift in skills. Moreover, geopolitical factors may influence manufacturing strategies, prompting firms to balance supply chain efficiency with risk mitigation. Overall, the emphasis on innovation, sustainability, and resilience is set to continue shaping the manufacturing sector's evolution in the near future.
NAICS 311 - Food Manufacturing
NAICS 312 - Beverage and Tobacco Product Manufacturing
NAICS 314 - Textile Product Mills
NAICS 315 - Apparel Manufacturing
NAICS 316 - Leather and Allied Product Manufacturing
NAICS 321 - Wood Product Manufacturing
NAICS 322 - Paper Manufacturing
NAICS 323 - Printing and Related Support Activities
NAICS 326 - Plastics and Rubber Products Manufacturing
NAICS 327 - Nonmetallic Mineral Product Manufacturing
NAICS 331 - Primary Metal Manufacturing
NAICS 332 - Fabricated Metal Product Manufacturing
NAICS 333 - Machinery Manufacturing
NAICS 334 - Computer and Electronic Product Manufacturing
NAICS 335 - Electrical Equipment, Appliance, and Component Manufacturing
NAICS 336 - Transportation Equipment Manufacturing
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