(iii) Equipment. From a number of causes, of which the most important are Allied strategic bombing and the dilution of labour, German industrial production as a whole is declining. This must have upset the planned replacement of the heavy losses of material incurred last winter and the equipment of the reconstituted divisions. Further, though the Germans must know that Allied bombing of their industrial centres will continue, probably on a mounting scale, they cannot assess its effects on the future fulfilment of their production plans.