Within Speer’s field, the bulk of the expansion in output came not from rationalization but from payoff from the heavy investments made in 1940-1, guarantees of food and financial stability and, most importantly, inputs of labor and raw materials. Finances, food and labor were handled by others through the year and Speer had a 30% increase in his workforce in 1942. Among raw materials steel was king: there were extensive reallocations and production soared. For that to happen, however, another crisis had to be faced, and Speer played a role.

In June the industry was organized in the Reichsverenigung Eisen (RVE), modeled after the RVK but lacking any “steel tsar”; it was instead pluralistic with the leading steel industrialists represented in its presidium. Though Vestag’s Voegler was the most important the chairman was Roechling.
Steel rationing had been disorganized since the end of 1941, when priority was shifted back to the army; entitlements for bombs, anti-aircraft shells and naval and aerial expansion were cut, but some remained for investment and exports. There was now a “ration inflation” with more steel entitlements than actual steel, allowing producers to pick the grades of steel they wanted and not the ones needed for high priority projects. With Kehrl’s help the backlog of steel orders was canceled, entitlements slashed to match production -with the greatest cut falling on the civilian sector- and only issued to 90% of total production, with 10% for priority projects.
Previously enough iron ore and scrap to continually grow steel output, but at the turn of the year it dropped due to a coal crisis. It could recover and soar but only with more coking coal. Some of the fall over the winter was logistical, as the railways strained under the size of the Reich’s new territory. Speer oversaw a crash locomotive program with a 90% increase in the sector’s workforce.
But even then Pleiger couldn’t provide the needed coal. Output was dying in occupied territories and even German mines suffered from lack of manpower. Speer and Hitler pressured Pleiger and the steel industrialists to come up with a solution. Sauckel promised more men but did not deliver. Ultimately the answer found in October was to slash domestic coal consumption by 10% and have the steel firms pool the output of their coal mines.

With the coal crisis dealt with the Reich achieved a heavy industrial boom. Steel production soared to 2,7 million monthly tons in 1943. If iron mines could be held, it could continue to rise and reach 3,25 million tons in April 1945. This, not “rationalization”, is the foremost reason for the main period of the Speer miracle, from his nomination to early-mid 1943. Even the productivity improvements that did take place owe a lot to the economies of scale made possible by the increase in inputs. Naturally, the period came to an end when the steel surge itself was interrupted. With Allied bombing of the Ruhr from March to July 1943 output did not rise but rather fell by 200,000 tons. Until a final second burst in 1944 the speed at which armaments output grew slowed down considerably, revealing how much the first period depended on the steel boom.