Casablanca – Morocco’s industrial sector delivered mixed signals in mid-2026, with manufacturing output declining sharply in the second quarter while monthly activity improved in July. The contrasting figures point to significant differences between industrial branches, with food processing, automotive manufacturing and metal products recording growth, while chemicals, textiles and several other activities faced weaker production. 

Data from the High Commission for Planning (HCP) showed that the production index for manufacturing industries, excluding oil refining, fell by 4.5% in the second quarter of 2026 compared with the same period a year earlier. The decline followed weaker performance in several important branches, particularly chemicals, clothing, electronic and optical products, printing and furniture. 

Chemical production recorded the largest decline among the main manufacturing activities, falling by 29.5% year on year. Production of computer, electronic and optical products decreased by 19.5%, while clothing output dropped by 10%. Printing and reproduction of recorded media declined by 12.3%, and furniture production fell by 5%. 

The quarterly figures nevertheless showed that the downturn was not spread evenly across manufacturing. Food production increased by 5.7%, while output of other non-metallic mineral products rose by 5.9%. Metal products manufacturing, excluding machinery and equipment, recorded stronger growth of 14.1%. 

Automotive manufacturing also expanded, with production increasing by 6% during the second quarter. The performance is consistent with the continued importance of automotive production within Morocco’s export-oriented manufacturing base, although the sector’s monthly performance can vary according to orders, foreign demand and production schedules. 

Mining also recorded an increase of 11.6% in the second quarter. This contrasted with the 28.8% decline recorded in the broader extractive industries production index, which was mainly attributed to a 29.6% decrease in other extractive activities. Ferrous metal production edged up by 0.6%. 

Electricity generation provided another positive element, with the production index for electrical energy increasing by 1.9% year on year. 

The monthly picture in July was more favorable. Bank Al-Maghrib’s business survey indicated that industrial production and sales increased during the month, while the average capacity utilization rate reached 81%. The results suggest that the weakness recorded during the second quarter did not continue at the same intensity across all branches as the third quarter began. 

Food processing and chemicals and petrochemicals recorded increases in production in July. Textile and leather production remained broadly stable, while mechanical and metallurgical production declined. 

Sales also developed differently across sectors. Food processing and chemicals and petrochemicals recorded higher sales, while textile and leather and mechanical and metallurgical activities experienced declines. By destination, domestic sales increased, whereas sales to foreign markets decreased. 

The July figures indicate that domestic demand provided some support to industrial companies at a time when external sales were weaker. This distinction is particularly relevant for sectors with a substantial exposure to international markets, where changes in foreign orders can have a direct effect on production levels. 

The food-processing sector recorded a capacity utilization rate of 75% in July. Production increased, while sales rose in both domestic and foreign markets. Orders also increased and order books remained at a normal level. Companies in the sector expect production and sales to continue rising over the next three months, although uncertainty remains relatively high. Some 47% of businesses reported uncertainty concerning future production, while 43% expressed uncertainty about future sales. 

The textile and leather sector presented a weaker picture. Overall production was stable in July, but this reflected different developments within the sector. Leather and footwear production increased, clothing and fur production remained stable, and textile production declined. Capacity utilization stood at 74%. 

Sales in textile and leather declined across the different subsectors, both domestically and abroad. Orders also decreased, leaving order books below normal levels. Companies in the sector expect production and sales to remain stable over the next three months rather than recover immediately. Uncertainty was also elevated, with 46% of companies reporting concerns about future production and 38% about future sales. 

Chemicals and petrochemicals provided a more positive monthly performance despite the sector’s substantial decline in the second quarter. Production increased in July, and capacity utilization reached 82%. Sales also rose, supported by higher domestic sales, although foreign shipments decreased. 

Orders in the sector declined and order books remained below normal levels. Even so, companies expect production and sales to increase during the following three months, suggesting that manufacturers anticipate some improvement in demand despite the recent weakness in orders. 

Mechanical and metallurgical activities recorded the highest capacity utilization rate among the main branches covered by the survey, at 87%, even as production declined in July. Sales also fell overall, reflecting weaker foreign shipments despite an increase in domestic sales. 

Orders, however, increased in the sector and order books were above normal levels. Companies therefore expect production and sales to rise over the next three months. About 23% of businesses reported uncertainty over the future direction of production and sales. 

The divergence between production, sales and orders across sectors highlights the uneven nature of Morocco’s industrial performance. A high capacity utilization rate in some branches does not necessarily translate into immediate growth in output, while rising orders can precede an increase in production in subsequent months. 

The July survey also showed that industrial companies generally expected activity to improve over the following three months. Production and sales were forecast to increase in most branches, with textiles and leather standing apart as the sector where companies anticipated broadly stable activity. 

At the national level, the figures suggest that Morocco’s industrial sector entered the second half of 2026 with a combination of persistent weaknesses and areas of expansion. The 4.5% annual decline in manufacturing output during the second quarter reflects substantial contractions in several activities, particularly chemicals and clothing. At the same time, growth in food processing, automotive manufacturing and metal products shows that other branches continued to expand. 

The contrast between the quarterly HCP data and July’s Bank Al-Maghrib survey also underlines the importance of distinguishing between broad annual comparisons and short-term industrial trends. While the second-quarter figures capture a period of significant weakness compared with 2025, the July survey points to an improvement in current business conditions in several branches. 

External demand remains one of the main variables for the coming months. The July decline in foreign sales across several sectors suggests that international markets continued to present challenges, even as domestic sales increased. The evolution of export orders will therefore remain important for manufacturers whose production depends heavily on overseas customers. 

Morocco’s industrial performance will also depend on whether the stronger activity seen in food processing, automotive manufacturing and metal products can be maintained while weaker sectors recover. The expectations reported by companies indicate a generally more positive view for the next three months, but the relatively high level of uncertainty reported by businesses shows that manufacturers remain cautious about the durability and strength of the recovery.