Cambodia’s
garment and footwear exports is expected to see a slower growth of around 5 per
cent this year compared to 7 per cent in 2016. But the trend is a normal market
occurrence and does not indicate an overall decline or is linked to the
political situation, say industry experts. Twenty five new factories opened
this year in Cambodia while 53 shut shop.
As the base number gets bigger, the same rate of
percentage growth cannot be maintained forever, Ken Loo, secretary general of
the Garment Manufacturers Association in Cambodia (GMAC) told the recent annual
Cambodia Textile Summit, according to a newspaper report.
Urged the government to help reduce the cost of
doing business, Loo said the increase in the minimum monthly wage from $153 to
$170 from January 1 would make Cambodia gradually lose its competitive
advantage as a low-cost destination. Manufacturers will soon need to increase
productivity to remain competitive in the industry, he added.
The latest economic outlook released by the
International Monetary Fund also predicted a slower growth for the country’s garment sector owing to
increased competition from neighbouring countries. However, preferential US
trade access for specific travel-related items could help prop up the sector in
the near term, IMF said. The
minimum wage hike would surely jeopardise the sector if worker productivity
does not increase, said Enjoy Ho, president of the textile enterprise
association at the Chinese Chamber of Commerce in Cambodia.