Morocco’s textile and leather industry faced a significant slowdown in March 2026, emerging as the weakest-performing segment within the country’s manufacturing sector despite broader signs of industrial recovery, according to the latest monthly business survey released by Bank Al-Maghrib.
The data highlights mounting pressure on one of Morocco’s most important export-oriented and employment-intensive industries, reflecting softer international demand, weaker order flows, and persistent uncertainty among manufacturers.
The survey showed that 45 percent of textile and leather companies experienced a decline in production during March, while only 12 percent reported growth, resulting in the most negative production balance across all manufacturing branches at minus 34 points.
Sales conditions were equally challenging, with 40 percent of firms recording lower sales and only 5 percent posting increases, leading to a negative balance of minus 35. The downturn affected both domestic and export markets, signaling broad-based weakness rather than isolated disruptions in specific channels.
New orders also remained under pressure across most textile subsectors. Around 28 percent of companies reported falling orders, compared to only 8 percent that saw improvements. Businesses further indicated that order books remained below normal levels across nearly all activities, highlighting limited short-term visibility and reduced confidence in market recovery
The contraction impacted nearly every segment of the industry except leather goods and footwear, which showed comparatively better resilience during the month.
Capacity utilization in the sector stood at 77 percent, lower than Morocco’s industrial average and significantly below the 88 percent utilization rate reported in the country’s mechanical and metallurgical industries, which benefited from stronger industrial activity and infrastructure-related demand. Lower utilization rates generally indicate factories operating below efficient production levels, often increasing operating costs and reducing profitability for manufacturers.
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The weak performance comes at a critical time for Morocco’s textile industry, which plays a major role in the national economy. The sector is one of the country’s largest industrial employers and a key contributor to export earnings, supplying apparel, technical textiles, leather products, and footwear primarily to European markets such as Spain and France.
Morocco has long positioned itself as a nearshoring destination for European fashion brands due to its geographic proximity, relatively short lead times, and integrated supply chain capabilities.
However, the industry has been facing growing challenges over the past year. Slower consumer spending in Europe, high inflation across key export markets, volatile raw material prices, and intense competition from Asian manufacturing hubs have weighed heavily on order volumes.
Many Moroccan producers are also dealing with rising energy costs, labor expenses, and currency-related pressures, while global fashion retailers continue to adopt more cautious inventory strategies following years of supply chain disruptions.
Industry analysts note that uncertainty remains one of the sector’s biggest concerns. The central bank survey found that 37 percent of textile manufacturers lacked clear visibility regarding future production trends over the next three months, while 54 percent said they had no estimates for future sales activity.
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Such uncertainty often delays investment decisions, hiring plans, and expansion strategies, particularly among small and medium-sized enterprises that dominate much of Morocco’s textile ecosystem.
Despite the current slowdown, Morocco’s textile industry continues to benefit from strategic advantages including trade agreements with the European Union and the United States, improving industrial infrastructure, and ongoing sustainability initiatives aimed at attracting international sourcing partnerships.
Several manufacturers are increasingly investing in automation, sustainable production technologies, recycled materials, and faster-response supply chain models to strengthen competitiveness in a rapidly evolving global apparel market.
Economists believe the pace of recovery in Morocco’s textile sector will largely depend on improvements in European retail demand, stabilization of global economic conditions, and the ability of manufacturers to adapt to changing sourcing patterns and sustainability requirements from international brands. Until then, the sector is expected to remain under pressure, with cautious business sentiment likely to persist in the coming months.
