Given the depressing effect of the gradual decline in oil production and the slow progress in manufacturing, in contrast to the faster growth of services, the importance of production industries in the economy will be lower by the end of the decade. Estimates based on volume changes alone, disregarding the future course of relative prices, indicate that ‘de-industrialisation’ appears to be continuing. This is not especially a British phenomenon and may be experienced by many industrial countries. It is more important for the UK, however, because falling oil production poses a considerable threat to the balance of payments. Manufacturing ought to play a decisive part in filling the gap and its revitalisation in the coming years is of paramount importance. In this context we are in agreement with the recent Select Committee Report which found the implications of the growing trade deficit in manufactured goods ‘most serious’ and ‘the need for change urgent’.