Casablanca – Morocco’s industrial sector closed 2025 on a broadly stable footing, according to the latest monthly and quarterly business surveys released by Bank Al-Maghrib. The data point to a business climate that remained generally “normal” across most industrial branches, with moderate improvements in some sectors and persistent challenges in others. While production and sales trends showed mixed performance at the end of the year, expectations for early 2026 suggest a cautious recovery, particularly in investment and employment.

Stable business climate across most industries

Bank Al-Maghrib’s quarterly survey for the fourth quarter of 2025 indicates that most industrial business leaders assessed overall operating conditions as stable. Supply conditions were described as normal in agri-food and in chemicals and related industries, easy in textiles and leather, and more difficult in mechanical and metal industries. This sectoral divergence highlights the uneven nature of industrial performance, despite the overall stability of the business environment.

Financial conditions also remained broadly supportive. Access to bank financing was considered normal by 93% of surveyed companies, with only limited difficulties reported, mainly in textiles and leather. Credit costs were generally stable, while cash flow positions were described as normal by 85% of firms, reinforcing the perception of financial resilience across the industrial sector.

Production trends: selective improvements and sectoral contrasts

According to the monthly business survey for December 2025, industrial production recorded modest improvements in selected branches. Output increased in textiles and leather as well as in chemicals and related industries, reflecting improved demand or operating conditions in these segments. Production remained stable in agri-food, while mechanical and metal industries experienced a decline, confirming the pressure facing this branch.

Despite these mixed trends, capacity utilization remained steady at 79%, unchanged from the previous month. This level suggests that industrial facilities were operating close to their recent average, without significant acceleration or contraction in overall activity.

Sales performance and market destinations

Sales trends at the end of 2025 mirrored the differentiated performance observed in production. Sales increased in chemicals and related industries as well as in mechanical and metal sectors, while remaining flat in textiles and leather and declining in agri-food. Importantly, sales growth was observed in both domestic and foreign markets, indicating that Moroccan industrial products continued to find demand beyond the local economy, despite global uncertainties.

However, the overall volume of new orders declined. This decrease was driven by lower orders in textiles and leather and in chemicals and related industries, while agri-food orders remained stable and mechanical and metal industries recorded an increase. Order books were generally assessed as normal, though above-normal levels were reported in mechanical and metal industries, while below-normal levels were observed in textiles and leather and in chemicals and related industries.

Employment: stability in late 2025, cautious recovery ahead

Employment levels remained largely stable during the fourth quarter of 2025. This stability was particularly evident in agri-food and in textiles and leather. In mechanical and metal industries, 90% of business leaders reported stable workforce levels, while 10% recorded an increase. In chemicals and related industries, 74% reported stable employment, while a smaller share experienced a decline.

Looking ahead to the first quarter of 2026, manufacturers anticipate a general improvement in employment across most industrial branches. The exception remains mechanical and metal industries, where a decline in workforce levels is expected, reflecting ongoing structural or demand-related challenges in this segment.

Costs, supply conditions, and cash flow

Unit production costs were broadly stable in the fourth quarter of 2025, with 67% of companies reporting no change. However, 20% reported an increase, with the highest proportions observed in textiles and leather and in chemicals and related industries. In contrast, a significant share of companies in mechanical and metal industries reported a decrease in production costs, while costs remained stable in agri-food.

Cash flow conditions remained generally sound. Across the industrial sector, 85% of firms described their cash positions as normal, while 11% considered them difficult. This pattern was broadly consistent across branches, with only moderate variations, indicating that liquidity pressures were contained for most operators.

Investment outlook and financing behavior

Looking forward, Bank Al-Maghrib’s survey indicates that industrial firms expect a broad-based increase in investment spending in early 2026. This anticipated rebound in investment reflects a degree of confidence in the medium-term outlook, despite the mixed performance observed at the end of 2025.

Currently, companies finance approximately two-thirds of their investment expenditures through self-funding, suggesting a cautious approach to external borrowing while maintaining capacity for expansion. The combination of stable financing conditions and expectations of higher investment suggests that firms are positioning themselves to take advantage of potential demand recovery or structural opportunities.

Outlook for production and sales in 2026

For the first quarter of 2026, manufacturers expect overall production to remain stable, with declines anticipated in most branches except mechanical and metal industries, where growth is expected. At the same time, more than one in five companies report uncertainty regarding future production trends, reflecting the continued presence of external risks and sector-specific challenges.

Sales are expected to remain broadly stable across most branches, with the exception of chemicals and related industries, where a decline is anticipated. This cautious outlook reflects both the resilience of domestic demand and the ongoing volatility of external markets.

Resilience with uneven performance

The latest data from Bank Al-Maghrib highlight the resilience of Morocco’s industrial sector at the end of 2025. The business climate remained stable, financial conditions were supportive, and employment levels held steady. At the same time, performance varied significantly across branches, with textiles, leather, and chemicals showing signs of improvement, while mechanical and metal industries continued to face challenges.

Looking into 2026, the outlook is characterized by cautious optimism. Firms anticipate higher investment and employment in most sectors, supported by stable financing conditions and manageable cost pressures. However, uncertainty remains, particularly in mechanical and metal industries, underscoring the need for continued monitoring of sectoral dynamics and policy support to ensure a broad-based and sustainable industrial recovery.