Fuel was a big (bigger?) problem. Albert Speer was an organizational genius and plane production (unsure about tanks etc) was actually increasing despite the bombardment. Lack of fuel and pilots scuppered the air force.
I'd love to post the graph I can't find, but this Wikipedia article gives GDP versus year. Until 1945 German output was increasing. http://en.m.wikipedia.org/wiki/Military_production_during_Wo...