Cambodia's textiles and apparel (T&A) exports declined by 13.3 per cent to $11.1 billion in 2023. Despite this, the sector demonstrated resilience by setting up 241 new plants, bringing the total active factories to 2,125 by the year's end.
The decline in exports was particularly notable in key markets such as the European Union, where apparel exports fell by 13 per cent to €3.2 billion, and the United States, witnessing a staggering 23.5 per cent drop to $3.3 billion.
Ranking sixth among apparel suppliers to both regions, Cambodia attributed these setbacks as primary contributors to the overall downturn in 2023.
However, when considering the remarkable surge in Western orders during 2022, which amplified Cambodian exports by 15 per cent, the downturn appears more as a necessary correction than a systemic failure.
Nonetheless, concerns loom over Cambodia's relationship with Western markets. The US’s decision not to renew Cambodia's membership in the Generalised System of Preferences program and the reduction of customs advantages through the EU's EBA program have raised alarms among local manufacturers.
This uncertainty has prompted calls for diversification within Cambodia's industrial sector, despite textiles and apparel still comprising at least one quarter of the country's GDP. The allure of Cambodia to Western buyers persists due to its competitive advantage in labor costs, with textile workers earning an average of $61 per month.
This advantage has fueled an 11.24 per cent increase in investments within the local textiles industry, with total investments reaching $18.5 billion last year. Notably, foreign investment, particularly from China, has played a significant role in this expansion.
As a result, Cambodia's textiles and apparel sector now boasts an estimated output volume worth $16.3 billion, according to data from Cambodia’s Ministry of Industry, Science, Technology, and Innovation.
