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    Bank Al-Maghrib: Investment Spending Stagnated in 3rd Quarter of 2020

    More than half of manufacturers (61%) expect investment spending to stagnate in the next quarter, while 28% expect an increase.

    10 Nov 2020

    Rabat – Bank Al-Maghrib recently announced that 44% of industrialists in Morocco reported stagnation in investment spending in the third quarter of 2020.

    Meanwhile, 33% of industrials indicated that investment spending declined.

    Approximately 58% of agro-food companies reported that their investment expenses are stagnant, while 26% reported a total decline.

    Morocco’s central bank added that 53% of mechanics and metallurgy companies reported stagnation while 41% reported a decline. In the textiles and leather sector, 46% of companies reported stagnation and 48% reported a decline.

    In the field of chemistry and p-chemistry, 52% of companies reported an increase in investment spending compared to 30% who reported stagnation.

    For the next quarter of 2020, 61% of manufacturers expect investment spending to stagnate, while 28% expect an increase.

    In addition to industrial investments, Bank Al-Maghrib also reviewed business leaders’ access to bank financing during the third quarter of 2020.

    The bank said that 83% of business leaders in the industry said that access to bank financing was “normal” while 14% of others found it difficult to access bank financing.

    Access was qualified as normal by 88% of industrials in chemistry and p-chemistry, 83% of food processing companies, and 80% of mechanics and metallurgy companies.

    Approximately 45% of manufacturers in other industries found access to financing difficult.

    Bank Al-Maghrib said the cost of credit would have been stagnant in the third quarter of this year in both the agro-food industry and the chemistry and p-chemistry industry.

    In the mechanics and metallurgy industry, however, 53% of companies indicated a cost of credit unchanged from the previous quarter while 41% said it was down.

    Meanwhile, 68% of textile and leather manufacturers indicated a stagnating cost of credit, while 26% are expecting an increase.

    The bank’s review also showed that 63% of manufacturers said the cash flow situation was normal while 26% rated it as difficult.

    “The proportion of companies indicating a ‘normal’ situation was 84% in ‘mechanics and metallurgy,’ 83% in ‘agro-food,’ 50% in ‘textiles and leather,’ and 45% in ‘chemistry and p-chemistry,’” Morocco’s central bank said.

    The share of manufacturers qualifying their cash flow situation as difficult varies from 13% in agro-food to 44% in textiles and leather, Bank Al-Maghrib’s overview explained.

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