Garment export growth to slow to 5% in 2017

Cambodia’s garment and footwear exports will likely see a growth at around 5% this year, compared with 7% in 2017, a trend that industry insiders said due to a natural slowdown rather than an indicative of an overall decline or the current political situation. Ken Loo, secretary-general of the Garment Manufacturers Association in Cambodia, said that slower growth was normal market occurrence as the overall production base increases. While he was generally positive about the industry’s health, he warned that the increase in minimum wage—going from $153 a month to $170 a month effective January 1, 2018—would cause the Kingdom to gradually lose its competitive advantage as a low-cost destination. He urged the government to help reduce the cost of doing business to offset the rising labor cost. Enjoy Ho, president of the textile enterprise association at the Chinese Chamber of Commerce in Cambodia, said that the Kingdom’s advantages for attracting investment into the garment sector remains its abundance of its cheap labor and preferential trade status under the EU’s Everything But Arms scheme and duty-free access to the US for travel goods. However, he opined that the minimum wage hike would surely jeopardize the sector if the worker productivity does not increase. (Source: Phnom Penh Post)