With the onset of industrialisation, a residential area emerged to the west and south of the old town, and industrial areas to the north. During the Second World War, it was the site of a prisoner-of-war camp, mainly for Poles and Russians. 1,700 prisoners were housed in tents that contained only 100 bunks. The camp was liberated by American Forces in April 1945. A number of mass graves were discovered. 1,200 civilians from the neighbouring city of Weimar were brought on a forced tour of the camp. This included a "parchment display" which displayed a "lampshade made of human skin." The display also included pieces of skin used for painting pictures. After the Second World War, the town expanded further to the north along the Geratals, new residential areas emerged in the 1970s and 80s, in the east and southeast of Arnstadt, including the residential Raven Hold. Arnstadt is a manufacturing centre with glassworks and foundries, a solar panel production plant, and glove-manufacturing and wood-finishing businesses.