Cambodia’s Garment Manufacturing Industry
Cambodia’s Garment Manufacturing Industry continues to stand tall as a key driver of the nation’s economy and a vital player in the global garment market. According to the latest findings by CRI, Cambodia’s vibrant textile and clothing sector remains a force to be reckoned with.
Cambodia, known for its youthful demographic structure, is witnessing a steady rise in socio-economic prosperity. With a population of approximately 17.2 million, where over 30% are under the age of 30, the country’s youth-driven market is primed for growth over the next 10 to 15 years.
The textile and garment sector, thriving since the 1990s, holds a prominent position in Cambodia’s economic landscape. This success can be attributed to the country’s competitive labor costs, even as wages rise. In 2022, Cambodia achieved a real GDP growth rate of 5.1%, reflecting the nation’s economic resilience.
This industry plays a pivotal role in Cambodia, contributing over 40% to the nation’s total merchandise exports and forming a significant part of the GDP. Boasting consistently expanding export volumes, garment manufacturers have become significant non-agricultural employers, offering jobs to more than 750,000 workers in over 600 factories.
Foreign investment flows into Cambodia’s garment industry, with around 90% of these factories being Chinese-owned. Additionally, European companies, like those from the Netherlands, have made significant investments. Cambodia’s garment exports are primarily directed toward Western markets, with the European Union (EU) as the largest recipient, followed by the United States.
Despite its remarkable growth, the industry faces challenges related to high energy costs and low productivity, impacting its competitiveness in the region. In response, the International Finance Corporation’s (IFC) Cambodia Improvement Program (CIP) has implemented resource efficiency measures, achieving energy and water savings. These measures not only boosted productivity but also aligned with Cambodia’s goal to reduce greenhouse gas emissions by 40% by 2030.
CRI’s analysis of Cambodia’s apparel and clothing sector from 2018 to 2022 reveals fluctuating growth in total export value, with a Compound Annual Growth Rate (CAGR) of 3.01%. The COVID-19 pandemic affected Cambodia’s apparel manufacturing industry in 2020, resulting in a 10.63% YoY decrease in export value. Subsequently, in 2021 and 2022, the sector rebounded, with export values reaching $8.018 billion and $9.035 billion, respectively.
As the global textile and garment industry shifts towards Southeast Asia, Cambodia’s sector is well-positioned to reap the benefits. Backed by strong government support and promotion, CRI predicts that Cambodia’s garment industry will achieve an export value of $19.9 billion by 2032, exhibiting a Compound Annual Growth Rate (CAGR) of 8.2% from 2023 to 2032.
For a comprehensive insight into this thriving industry, please refer to CRI’s Cambodia Garment Manufacturing Industry Research Report 2023-2032.
Related: Indonesia Garment Manufacturing Industry to Grow at 5.5% CAGR from 2023 to 2028
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