A structural approach is used to study the socio-economic and spatial implications of restructuring in New Zealand's textile industry. Government policy, specifically the textile plan, is analysed in an attempt to determine the industry's structural response to change in its operating environment. Development of textile manufacturing, as well as market and technological environments effecting change are examined. These reveal contradictions inherent in capitalist production as well as emerging conflicts resulting from changes in production relations within the industry. It is found that changing relationships in product, company, employment, and spatial structures lead to socio-economic inequalities, expressed primarily in the textile industry's core-periphery structure. Government policy appears to have hastened these processes without changing underlying relationships responsible for inequality. Government policy is thus seen to perpetuate the status quo. The analysis suggests the textile industry is increasing its concentration in core areas, thereby altering its traditional dispersed spatial pattern. Policies to alleviate regional inequalities appear to be incompatible with restructuring. The study concludes that capitalist economic growth and social equity policy aims are contradictory, and that inequalities will inevitably widen if government promoted restructuring continues.