In 1943 the Reich’s situation was growing desperate. Nonetheless arms output continued to rise. The focus was nominally on tanks through the Adolf Hitler Panzer Programme announced on January 23. They received resources from other sectors, their workforce labored for more hours and the industry was given “Panzer priority” in deliveries, a priority the Luftwaffe soon lobbied and also got for itself. Production soared and now the Panther and Tiger saved Germany’s qualitative position in the field of tanks. But they were still only a small fraction of the overall war effort in terms of resources consumed and wider production successes were achieved in the Luftwaffe.
The year’s summer offensive at Kursk was anticlimactic. What followed were relentless Soviet offensives until by spring 1944 Army Group South had been evicted from the Ukraine. The Kriegsmarine was all but knocked out of the war, interrupting its surface and submarine campaigns. Meanwhile Mussolini was toppled and the Allied strategic bombing campaign became serious with the battles of the Ruhr and Hamburg. They interrupted the steel boom, driving down production, and triggered a subcomponents crisis (Zulieferungskrise). The classic period of the “Speer miracle” was over. The speed at which arms output expanded slowed down across the board. Tank production fared better because it was compensated with more resources.
It was at this point that civilian morale began to die out.

The Reich’s leadership responded with a “determined escalation of violence”. SS and Party extended their control and politicization of general and factory security, local government and the courts. Repression kept the population, including the upper classes, in line, though it could not contain the growth of the black market which fed the inflation that would burst into the open in the next year. Speer subordinated Kehrl, fully took over the navy and closely allied with Himmler and Goebbels and together they sought “total war” (though that was already part official rhetoric since the winter), employing the repressive apparatus to extract whichever civilian capacity remained for the war effort. This is something I’ll cover later as not all of the extra weapons production achieved in the last years of the war can be attributed to this, nor was there so much capacity lying idle; the undermobilization of the early war German economy is overstated.
Speer’s attentions moved away from tanks to two projects: the V1/V2 and the Mark XXI U-boat. The former produced some of the most advanced technology of the war but ultimately offered little help to Germany’s situation. The latter was precisely what was needed to respond to Allied anti-submarine efforts and restart the Battle of the Atlantic, but the Speer Ministry’s promises of a quick delivery were a fiasco.

In 1944 Germany only had two consolations: it still had large buffers of occupied territory, preventing any enemy strike from immediately hitting the heartland, and could prolong production after the loss of economically valuable areas with its stocks of raw materials.