Casablanca – Industrial activity and construction in Morocco recorded generally positive but uneven developments at the end of 2025, while business leaders expect improved conditions during the first quarter of 2026. These conclusions emerge from the latest quarterly business surveys published by the High Commission for Planning (HCP), which assess recent performance and short-term expectations across the country’s productive sectors.

Manufacturing sector ends 2025 with higher production

According to the HCP survey, production in the manufacturing sector increased during the fourth quarter of 2025. This improvement was mainly supported by stronger activity in several key industrial branches, including the automotive industry, the chemical sector, metallurgy, and the manufacture of other non-metallic mineral products.

However, the performance across manufacturing industries was not uniform. Some segments recorded declines, particularly the food industry and the manufacture of electrical equipment.

Despite these differences among subsectors, manufacturing activity remained relatively stable in operational terms. Order books were generally described as being at normal levels by company executives, and employment remained largely unchanged during the quarter.

The survey also showed that the sector operated at a moderate level of capacity. The capacity utilization rate reached 74% during the fourth quarter of 2025, indicating that companies were using a significant portion of their production capabilities but still had room for additional output.

Supply challenges remain for manufacturers

Operational challenges persisted for a portion of manufacturing firms. Around 35% of companies reported difficulties obtaining raw materials during the fourth quarter of 2025. According to the HCP, these constraints were mainly related to inputs imported from abroad.

Nevertheless, companies indicated that their inventories of raw materials were generally at normal levels.

Financial conditions also varied among firms. Approximately 18% of business leaders described their cash-flow situation as difficult during the same period. The financial pressure appeared more pronounced in certain industries, particularly pharmaceuticals, where nearly 40% of companies reported facing cash-flow constraints.

Extractive sector shows stability but limited growth

The extractive industry recorded relatively stable activity during the final quarter of 2025. This stability was largely linked to unchanged production levels in the phosphate sector, which plays a central role in Morocco’s mining industry.

Although production remained stable, companies in the sector reported a decline in selling prices for their products. Employment levels, however, remained broadly unchanged during the period.

Looking ahead, businesses operating in the extractive industry anticipate a different trend for early 2026. Companies expect production to decline during the first quarter of the year, mainly due to a projected decrease in phosphate output. Despite the anticipated drop in production, firms still expect employment levels to increase.

Energy sector faces declining activity

In contrast with manufacturing, the energy sector experienced weaker performance during the fourth quarter of 2025.

According to the HCP survey, production in the sector declined, mainly due to reduced activity in electricity, gas, steam, and air-conditioning production and distribution.

This slowdown also affected employment, with the energy sector recording a decrease in workforce levels during the same period. Selling prices for energy products also declined.

Companies operating in the sector expect this downward trend to continue in the first quarter of 2026, with both production and employment projected to decrease further.

Environmental industries remain stable

Environmental industries recorded relatively stable performance during the fourth quarter of 2025. Activity remained largely unchanged, particularly in sectors related to water collection, treatment, and distribution.

Order books in this sector were considered normal, and employment levels remained stable.

Businesses in environmental industries expect these conditions to continue into the first quarter of 2026, with both production and employment projected to remain largely steady.

Construction sector records moderate growth

The construction sector also showed signs of improvement during the fourth quarter of 2025. Activity increased, supported mainly by stronger performance in civil engineering projects and specialized construction works.

In contrast, activity in building construction remained relatively stable during the same period.

The sector’s capacity utilization rate reached 69%, reflecting moderate levels of activity among construction companies.

Although order books were generally considered normal and employment remained stable during the quarter, some companies reported operational challenges. About 9% of construction firms indicated that they had encountered difficulties obtaining raw materials.

Financial pressures also affected a portion of companies. Approximately 31% of construction firms described their cash-flow situation as difficult.

Despite these challenges, investment activity continued within the sector. Around 39% of construction companies reported carrying out investment spending in 2025, mainly aimed at replacing part of their equipment.

Positive expectations for early 2026

Looking ahead to the first quarter of 2026, business leaders across several sectors expect improved activity.

Manufacturing companies anticipate higher production levels, particularly in the food industry, the chemical sector, and the manufacture of metal products excluding machinery and equipment. However, some segments, including the automotive industry and the manufacture of other non-metallic mineral products, may experience a decline in production.

Manufacturers also expect a slight increase in employment.

In the construction sector, companies anticipate a further rise in activity during the same period. The expected growth is mainly linked to stronger performance in building construction and civil engineering projects, although specialized construction works could see a decrease.

The anticipated increase in activity in construction is also expected to be accompanied by higher employment levels.

Outlook shaped by both opportunities and constraints

The HCP surveys suggest that Morocco’s industrial and construction sectors ended 2025 with generally stable conditions and moderate growth in several branches.

While supply constraints, financial pressures, and uneven sectoral performance continue to affect some companies, expectations for the beginning of 2026 remain broadly positive.

Manufacturing and construction are expected to play a key role in sustaining economic activity during the early months of the year, even as certain sectors such as energy and extractive industries face more cautious outlooks.