This paper analyses the performance of manufacturing industries in the leading industrialdistrict in Sweden, known as the Gnosjo region during the period 1980 to 1993. In particular, it focuseson a set of 22 industries at the finest level of industrial c1assification that accounts for than 75per cent of manufacturing employment in the Gnosjo region. These 22 industries that during the actualperiod is declining in the rest of Sweden grow substantially in relative terms and in some casesalso in absolute terms in the Gnosjo region measured in terms of employment. A life cycle approachis used to explain the possible driving forces behind the actual spatio-temporal pattems. Inparticular the role of productivity, labour costs and profitability is high-lighted. It tums out that inparticular a higher profitability than for the average regions seems to be important for explainingthe comparatively good performance of the 22 industries in the Gnosjo region.