Cambodia's minister of labour applauded the strong growth and employment levels for the garment and footwear sector yesterday, though industry representatives noted a slight slowdown due to increased competition from regional players.
Speaking at an event commemorating International Labour Day yesterday, Minister Ith Sam Heng said Cambodia’s garment sector growth remained healthy despite increased wages for workers.
According to Sam Heng, the sector created jobs for 750,000 workers and provided $2 billion in salaries annually with the minimum wage increasing by nearly 10 percent last year to $153 a month.
“With the combination of other additional benefits, each worker can get paid a total of about $170 per to $181 per month,” he said.
Van Sou Ieng, president of the Garment Manufacturers Association of Cambodia (GMAC), said that the sector is still growing despite tougher competition, mainly from Myanmar and Bangladesh.
“Some buyers are now ordering goods from those two countries, cutting down on some orders from us,” he said, adding that the value of exports in the first quarter of this year grew by 4 percent compared to same period in 2016.
“We are still able to survive, but the growth rate is at an average level with just single digit growth.”
According to Sou Ieng, GMAC consists of nearly 600 manufacturers with a total export value of $6.8 billion in 2016, a 9 percent increase compared to 2015. This was slightly lower than the 10 percent average annual growth over the past several years.
However, he added growth for the sector should begin to increase with the expansion of travel goods exports to the US that received duty-free privileges last July. Sou Ieng said that there are now 27 registered travel goods manufacturers in Cambodia.
“Some of them are building factories which will soon be operational,” he said. “The export value of Cambodian-made travel goods will increase noticeably in the near future.” The Garment industry continues to dominate Cambodia’s exports, accounting for over 10 percent of GDP.
Soeng Sophary, spokesperson for the Ministry of Commerce, said yesterday that emerging competitors like Myanmar and Bangladesh pose a challenge for Cambodia, though it remains manageable.
She predicts the country will maintain the healthy growth for garments and footwear in the medium term, thanks to the withdrawal of the US from the Trans-Pacific Partnership, which benefited competitors like Vietnam.
“Whenever our products are able to be exported to markets with duty-free access, we will still be able to enjoy growth.”