The price of the new regime's success in lowering inflation was a wrenching decline in the oil-related, commodities, auto, and equipment manufacturing industries, which at the beginning of the decade had accounted for 43% of the S&P 500. They had an 80% decline in return on equity, 69% decline in net capital expenditures relative to capitalization, and 16% decline in employment. The largest component of this decline related to the decline in oil prices. Oil-related industries declined from 25% to 16% of the S&P 500 between 1979 and 1984, and their capital expenditures declined from 28% to 10% of the U.S. total. The change was particularly difficult for those industries supplying the oil industry, such as oil and gas drillers, oil field services, engineering and construction, and steel tubing. The industry's decline also spread into the financial industry, creating bad debts for the banking industry, real estate problems for the savings and loan industry, and credit problems for the less-developed countries and the banks that lent to them.
The second major factor was the 55% rise in the dollar, which severely hurt the auto, steel, construction and farm machinery, machine tool, steel, aluminum, mining, pulp and paper, commodity chemical, and even the computer and office equipment industries. These industries' net exports declined 200%, as many switched to becoming net importers and imports rose from 17% to 25% of domestic production. Japanese manu