As the price of oil and the value of the dollar continue to slide, you can almost feel the weight being lifted from the back of American industry.

A year ago, American manufacturing was on that downhill slide. A presidential commission stocked with leaders from business, finance, organized labor and academia was warning that U.S. producers were losing the ability to compete against imports at home and in foreign markets.

For five years, an overvalued dollar had imposed a brutal tax on U.S. exporters while subsidizing the flood of foreign imports entering this country. In the same 1980-85 period, industrial production grew by an average of only 2 percent a year, and company after company reacted by selling losing business operations, closing plants and cutting jobs.

"An internationally competitive U.S. economy is a prerequisite for the national goals to which we aspire -- a rising standard of living for all Americans, our position as a leader of the free world and our national security," concluded the presidential commission headed by John A. Young, president of Hewlett-Packard Co.

Now the dollar has dropped dramatically from its 1985 peak, narrowing the price advantage that many foreign companies have enjoyed in U.S. markets. By the fourth-quarter of this year, the effects of a cheaper dollar should be giving a boost to corporate profits.

At the same time, the drop in oil prices has pumped up the stock market, while raising expectations of faster economic growth and a continued rosy outlook for low inflation.

But despite this good news, the competitive position of American producers and the job outlook for their employes is still imperiled.

"We're certainly not out of the woods," says Robert Z. Lawrence, a senior fellow at the Brookings Institution.

"The dollar's fall is a welcome development, because it takes some heat off of some industries," says Michael Porter, professor at the Harvard Business School and a key consultant to the Young Commission. But the fundamental problems, as he sees them, have not changed: In too many cases: "American goods are not the most advanced, nor do they have the highest quality, nor are they updated at the same rate" as competing foreign goods.

As Lawrence noted, the decline in the dollar, initiated last fall by Treasury Secretary James A. Baker III, has reversed part, but not all of its climb during the 1980s. "We're back to somewhere at the 1982-83 level for the dollar , and we thought then that the dollar was too strong," he said.

While the dollar's decline against the Japanese yen has been substantial, there has not been a comparable drop in relation to the currencies of other major competitors, such as Canada, South Korea and Brazil.

A second continuing weakness is business investment, according to Lawrence. Although the business-tax reductions enacted by the Reagan administration and Congress have encouraged investment, virtually all of it has been for trucks, automobiles, computers, office machines and other short-term equipment that doesn't do much to modernize and advance American plants.

That short-term focus made good sense when the dollar was high, but it hasn't helped American competitiveness, Lawrence said.

Overall, the growth of nonresidential fixed investment, after excluding changes in inventories and deducting depreciation, has been slower in the current decade than in any other recent decade, government data show.

Politically, business will have a hard time winning further concessions from Congress in the form of new incentives to invest when the tax reform debate is renewed.

Porter, who believes that further incentives are essential, is pessimistic about the tax debate. "The goal of stimulating business investment has been totally lost," he said.

The tax proposal passed by the House of Representatives "raises the cost of capital for business and will decrease investment and reduce economic growth," says Jerry Jasinowski, executive vice president and chief economist of the National Association of Manufacturers. "That certainly is a major step backward."

A third, crucial piece of bad news concerns that economy's poor performance on productivity in the 1980s. "That's the show stopper," said Porter. "It has not gotten better. In fact, the trend lines look worse."

While the gain in productivity for manufacturing during the current recovery has been greater than in previous recoveries, it has not been strong enough to offset a terrible performance in the nonmanufacturing sector through January 1985, and apparently since then. And much of the manufacturing sector's productivity improvement has come from plant shutdowns and layoffs, rather than from investments that increase employes' productivity, said Lawrence.

Finally, said Porter, the Young Commission concluded that the competitiveness problem was not confined to an over-valued dollar and a record budget deficit.

There is a long list of government policies that affect competitiveness, Porter said -- policies on trade, corporate mergers and government support for research, education and training, among others, he said.

There is still no systematic look at how these policies affect the American competitive position, and, thus, this country's standard of living, he said.