Yes. But much of it was also compensated for elsewhere. That is, raw production numbers don't always show it. But a very large part of German production that could have been turning out war materials was instead rebuilding the ability to turn out war materials.
That said, the proponents of strategic bombing pretty much always overstated the case for how much what they did mattered. Bombing did not cause anyone to surrender, nor did it cripple either the ability or the willingness to fight.
Interestingly, the "Speer Miracle", of rapidly rising armaments production figures in Germany over the second half of '42 and early '43 comes to an aprupt halt following the start of major allied bombing of the Ruhr region (March-June '43, including the famous Dambusters raid). The Germans were certainly able to
maintain the level of production they had by mid-'43, but the dirsuption caused to
the major industrial region of the Reich was a major factor in preventing them
increasing production further. Speer himself certainly felt that the Allies had hit Germany where it hurt after these raids.
Indeed, I've seen the argument made that after those initial heavy raids in the Ruhr, Bomber Command in particular got far to focused of bombing cities (especially Berlin), in the hope of creating another Hamburg (the first big firebombing), which had little impact on the war, instead of continuing to batter the Ruhr and other key industrial areas (bombing certainly did continue in these areas, but not to the extent of the early attacks), thereby further disrupting German industry.
The Ruhr was important not so much beacuse of factories actually making armaments, but because of the supply chain for those factories - it was Germany's biggest source of coal and their largest steel producing region, as well as the location of many smaller industries that fed components and sub-components into the actual armaments production. As such, while the bombing of that region didn't actualy
directly hit that much of Germany's assembly lines, it seriously disrupted their operation, particularly in the medium term, once their stockpiles of resources had been consumed. IIRC, the German industrial planners were expecting steel production to increase by about 10-15% in mid-'34. Thats to the damage done the the Ruhr, it actually
fell by that much. And no matter how effeciently run their factories were, no matter how well mobilised the nation was for war, if you don't have steel, you can't make guns, bullets or tanks. This was always the problem the Nazi administration had with regards armaments production - they never had enough steel to make what they wanted to. And the attacks on the Ruhr certainly did disrupt their ability to produce and distribute that most critical of metals.
This was then exasperated by the other major part of the bombing, hitting the transport links across Germany. Even if the raw materials and sub-components were beign produced, without working rail links, they couldn't be gotten to the factories. In 42-43, the Germans had done well to get the creaking Reichsbahn back on its feet after a decade of massive underinvestment, with major production of engines and railway wagons, but over the last couple of years of the war, the Allies systematically targetted major railways, in particular marshalling yards (and thereby locomotives). Again, the area around the Ruhr was the prime target - without the abiltiy to get coal and steel out of the region, particularly as the Reich was losing the coal and steel producing regions they had captured in the East, German power plants, factories and indeed homes were starved of resources. The damage to this region in particular was so bad that it wasn't until about 3 years after the end of the war that full rail links were restored between the Ruhr and the rest of Germany, which contributed to a severe shortage of coal for civilians in the immediate aftermath of the war.
Overall, my personal feelings on the effectiveness of the bombing campaign are mixed. The attacks on cities were a massive waste of time, resources and lives that did nothing to aid the war effort. The attacks on industry and transport links on the other hand, while not decisive in
winning the war, did have a significant effect on Germany's production capabilites, mainly by preventing the actual armaments factories from having sufficient input to be operated at maximum capacity, thus
reducing Germany's ability to fight. Obviously, they still put up on hell of a fight in the final couple of years of the war, but I believe it would have been even worse had the bombing campaign not done so much to disrupt their industry.
As with much on the subject of the Nazi economy and industry, Tooze's
The Wages of Destruction covers this pretty well and is my major source for the above. (And of course, now one of the experts here will come along and tell me that book is a load of crap and everything I thought I knew is wrong
).