UPDATE 1-German industrial pay talks progress, deal seen within reach

(Updates with progress, talks to resume)

STUTTGART, Germany, Feb 5 (Reuters) - German industrial workers and employers made progress in talks on Monday after a series of 24-hour strikes over pay and working hours and said they hoped to clinch a deal at another meeting in the evening.

The IG Metall labour union has demanded a 6 percent pay rise this year for about 3.9 million workers. It also wants members to have the right to work shorter hours to care for children or elderly or sick relatives.

"There's a difference but in our view it is bridgeable," said Stefan Wolf, a spokesman for the Suedwestmetall regional employers federation that covers southwestern Germany.

The hefty pay demand comes against a backdrop of a strong economic recovery in Germany and the lowest unemployment rate since unification in 1990, raising fears among some financial investors that it could prove to be inflationary.

IG Metall had threatened to ballot its members for extended industrial action if employers fail to offer concessions following the strikes.

Last week's strikes cost carmakers, automotive suppliers and engineering firms almost 200 million euros ($249 million) in lost revenues, affecting big firms like Daimler, BMW and Airbus and dozens of smaller suppliers.

IG Metall's chief negotiator Roman Zitzelsberger told reporters, after both sides withdrew for consultations, that more face-to-face talks set for Monday evening would seek to clear the final hurdles.

"There could be a breakthrough today," Zitzelsberger said.

Monday's talks were the sixth round in negotiations between IG Metall and Suedwestmetall, whose members employ half a million workers. Under Germany's system of wage bargaining, a deal in one region can set a national benchmark. ($1 = 0.8031 euros) (Reporting by Ilona Wissenbach; Writing by Douglas Busvine; Editing by Susan Fenton)