NAICS Code 23: A Complete Guide to the Construction Sector Classification

Table of Contents#

1. What Is NAICS Code 23, Exactly?
2. Core Subsectors of NAICS Code 23 (3-Digit Breakdown)
3. How to Find Your Exact 6-Digit NAICS 23 Construction Code
4. Key Use Cases for NAICS Code 23
5. Common Misconceptions About NAICS 23
6. Final Tips for Using NAICS Code 23 Correctly
7. References

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What Is NAICS Code 23, Exactly?#

NAICS Code 23 is the top-level 2-digit classification for all businesses operating in the construction sector in North America. It covers all activities related to the creation, repair, alteration, or demolition of buildings, infrastructure, and other fixed structures.

It is distinct from other related sector codes including:

• NAICS 31-33 (Manufacturing): For businesses that produce prefabricated building components or construction materials
• NAICS 54 (Professional, Scientific, and Technical Services): For architecture, engineering, and construction project management firms
• NAICS 42/44 (Wholesale/Retail Trade): For businesses that sell construction supplies to end users

NAICS codes are structured in 6 tiers, with each additional digit adding more specificity:

• 2-digit: Broad sector (e.g., 23 = Construction)
• 3-digit: Subsector (e.g., 238 = Specialty Trade Contractors)
• 4-digit: Industry group (e.g., 2382 = Building Equipment Contractors)
• 5-digit: Specific industry (e.g., 23821 = Electrical Contractors)
• 6-digit: National-level specialty (e.g., 238210 = Electrical Contractors and Other Wiring Installation Contractors, U.S. 2022 standard)

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Core Subsectors of NAICS Code 23 (3-Digit Breakdown)#

NAICS Code 23 is split into 3 core 3-digit subsectors, each with dozens of more specific 4, 5, and 6-digit codes for different construction specialties:

236: Construction of Buildings#

This subsector covers businesses that act as general contractors for entire new building projects or major building renovations.

• 2361: Residential Building Construction
  • Includes single-family custom home builders (e.g., NAICS 236115), multifamily apartment complex contractors (e.g., NAICS 236116), and residential remodelers (e.g., NAICS 236118)
• 2362: Nonresidential Building Construction
  • Includes office building contractors, retail store builders, hospital and school construction firms, and stadium construction companies (e.g., NAICS 236220 for Commercial and Institutional Building Construction)

237: Heavy and Civil Engineering Construction#

This subsector covers large infrastructure projects that are not classified as standard buildings.

• 2371: Utility System Construction
  • Includes water and sewer line installers (e.g., NAICS 237110), power line construction crews, and telecom pipeline contractors (e.g., NAICS 237130)
• 2372: Land Subdivision
  • Includes businesses that divide raw land into residential or commercial development parcels, plus related grading and access road installation (e.g., NAICS 237210)
• 2373: Highway, Street, and Bridge Construction (e.g., NAICS 237310)
• 2379: Other Heavy Engineering Construction
  • Includes dam building, railway construction, marine/dredging contractors, and flood control project contractors (e.g., NAICS 237990)

238: Specialty Trade Contractors#

This is the largest subsector for small construction businesses, covering firms that perform specialized work on construction projects rather than acting as the lead general contractor.

• 2381: Foundation, Structure, and Building Exterior Contractors
  • Includes framing (e.g., NAICS 238130), masonry (e.g., NAICS 238140), roofing (e.g., NAICS 238160), siding (e.g., NAICS 238170), and concrete pouring (e.g., NAICS 238110)
• 2382: Building Equipment Contractors
  • Includes plumbing and HVAC (e.g., NAICS 238220), electrical and wiring (e.g., NAICS 238210), fire alarm installation, and solar panel installation
• 2383: Building Finishing Contractors
  • Includes painting (e.g., NAICS 238320), drywall (e.g., NAICS 238310), flooring (e.g., NAICS 238330), tiling (e.g., NAICS 238340), and finish carpentry (e.g., NAICS 238350)
• 2389: Other Specialty Trade Contractors
  • Includes demolition crews, site preparation contractors (e.g., NAICS 238910), construction site cleanup services, fencing contractors, and all other specialty trades (e.g., NAICS 238990)

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How to Find Your Exact 6-Digit NAICS 23 Construction Code#

Follow these official steps to select the correct code for your business:

1. Identify your primary revenue-generating activity: The Census Bureau requires you to select the code that matches the activity that makes up the largest share of your annual revenue. For example, if 70% of your revenue comes from residential roofing and 30% from siding installation, select the code for residential roofing.
2. Use the official U.S. Census NAICS search tool: Navigate to the 2022 NAICS search page and enter keywords related to your core activity (e.g., "residential roofing") to generate matching code options.
3. Cross-verify code descriptions: Do not rely solely on keyword matches. Read the full official description of each potential code to confirm it aligns with your business operations.
4. List secondary codes where allowed: Most business registrations (including SAM.gov for government contracting) let you list multiple secondary NAICS codes to reflect all of your service offerings, but you will only have one primary code for reporting purposes.

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Key Use Cases for NAICS Code 23#

Your NAICS 23 classification impacts nearly every administrative part of your construction business:

1. Government Contract Bidding: 90% of federal, state, and local construction contracts are sorted by NAICS code. Registering under the correct 6-digit code ensures you receive bid alerts for projects you qualify for, and makes you eligible for construction-specific small business set-aside contracts.
2. Small Business Funding and Size Standards: The Small Business Administration (SBA) uses NAICS 23 codes to define size standards that determine if your business is "small" for federal contracts and loans. Unlike other industries that measure size by headcount, NAICS 23 uses revenue-based standards (average annual receipts calculated over the past 5 complete fiscal years, including affiliates):
   • Building & Heavy Civil (Subsectors 236 & 237): Most codes (e.g., 236220, 237310) have a size standard of $45.0 million.
   • Specialty Trade Contractors (Subsector 238): Most trades (e.g., 238210, 238220) have a size standard of $19.0 million.
3. Incentives and Financing: Access to SBA construction loans (such as 7(a) and 504 programs), green building tax credits, and state workforce training grants is often restricted to businesses registered under eligible NAICS 23 codes.
4. Market Research: Census Bureau economic data sorted by NAICS 23 codes lets you access subsector-specific data on market size, average revenue, competitor counts, and local wage rates to inform expansion plans.
5. Insurance and Workers’ Compensation: Insurance providers use NAICS codes to assess risk, and NAICS 23 codes correspond to industry-specific workers’ compensation rates. Using the wrong code can lead to overpayment or denied claims.
6. Tax Compliance: Many state and local tax exemptions for construction materials and hiring credits for local construction workers require a valid NAICS 23 code on your business registration.

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Common Misconceptions About NAICS 23#

Avoid these frequent mistakes when using NAICS 23 codes:

1. Myth: All construction-related businesses fall under NAICS 23: Architecture firms, construction material suppliers, and prefab building manufacturers fall under other NAICS sectors, even if they work exclusively with construction clients.
2. Myth: You only need one NAICS code forever: If your business shifts its activity (e.g., from being an electrical subcontractor to a full-service residential remodeler), you must update your NAICS code on official registrations annually.
3. Myth: The 2-digit NAICS 23 code is enough for all forms: 99% of official applications, loan requests, and contract bids require the full 6-digit specific NAICS code, not the broad 2-digit sector code.
4. Myth: NAICS 23 codes are identical across North America: 2-digit and 3-digit codes are standardized across the U.S., Canada, and Mexico, but 4 to 6-digit codes vary slightly by country. Cross-border operators must select the correct national version for each region they operate in.
5. Myth: Your small business size eligibility is based solely on your primary registered NAICS code: For government contracting, the contracting officer assigns a specific NAICS code to each individual solicitation based on the contract's primary purpose. Your size eligibility is evaluated against the size standard of that specific contract's code, which may differ from your primary code.

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Final Tips for Using NAICS Code 23 Correctly#

• Always use the most recent NAICS version (2022 remains the current standard as of 2026; the next revision is scheduled for release in January 2027)
• Add all relevant secondary NAICS codes to your SAM.gov profile to receive bid alerts for all service lines you offer
• Share your selected NAICS code with your accountant and insurance provider to confirm you are receiving the correct tax treatment and insurance rates
• If you are unsure which code fits your business, request a free official code determination from the U.S. Census Bureau NAICS help desk

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References#

1. U.S. Census Bureau. (2022). NAICS Code 23: Construction Sector Definition and Structure. Retrieved from https://www.census.gov/naics/
2. U.S. Small Business Administration (SBA). (2026). SBA Size Standards Tool and NAICS Code Guide. Retrieved from https://www.sba.gov/size-standards/
3. NAICS Association. (2022). NAICS Code 23 Construction Sector Code List. Retrieved from https://www.naics.com/naics-code-description/?code=23