German industry was reduced significantly by the Allies in the first few years following the war, under the rational of destroying Germany's ability to wage war in the future. German steel production in particular was limited dramatically - initially limited to 25% of its pre-war level - and other forms of manufacturing that were deemed as having the potential to support war production (automobiles, aircraft, ships, etc) were also dramatically reduced or prohibited. Coal mining remained, but the Allies set the price of German coal at well below market prices (and well below the cost of production), essentially meaning that they would be able to get German coal at bargain prices. Large amounts of industrial equipment was confiscated by the Allies and moved out of Germany. German trademarks, copyrights, and patents were also confiscated by the Allies, and German citizens were used as forced labour by both the Western Allies and the USSR.

However, many Allied leaders, particularly in the West, were questioning these policies even in the early days of the occupation. On the American side of things, the idea that Germany's economy had to be dismantled and that the standard of living in Germany had to be reduced in order to punish and prove a point to the Germany people had been advocated by Secretary of the Treasury Henry Morgenthau, Jr., and whilst Morgenthau himself resigned in July 1945 his ideas remained very influential, particularly amongst certain Army officers and Treasury officials leant to support the military government in the US occupation zone. Morgenthau's ideas made it into JCS 1067, an occupation directive that was in effect in the US zone between 1945 and 1947, which pretty much stated that the US Army could not attempt to strengthen the Germany economy or improve the standard of living of the German people, and that starvation and disease should only be kept at a minimum level in order to guarantee the safety of occupation forces.

By 1947 though, figures in the Army, Executive Branch, and Congress, concerned with such things as the starvation of the German people, the lacklustre economic recovery of Europe, the potential spread of communism in Germany, the costs of having to import food and supplies to Germany, and the very real spread of infectious diseases in Europe, were able to overturn most of those policies, including JCS 1067 itself, which was replaced by JCS 1779 that supported an orderly reconstruction of Germany. Individuals particularly significant in bringing about this change in policy include General Lucius Clay, Secretary of State James F. Byrnes, and former President Herbert Hoover (who was commissioned by President Truman to tour Germany and issue a series of reports). From that point on, the Western Allies would mainly focus on rebuilding Germany rather than punishing Germany.

I can't speak too much about the British, French, and Soviet side of things, because I don't know as much about their occupation policies as I do about the American ones. In general, though, British policy was similar if perhaps not quite as punitive as American policies during the early years (and like American policy it softened later on) whilst the French were certainly rather punitive (and understandably so). Soviet policies mainly focuses on bringing their occupation zone - what would become East Germany - into the Soviet system.

With West Germany's ascension to the European Coal and Steel Community in 1951, however, most industrial restrictions (besides those on arms production) were lifted.