40 apparel plants in Cambodia shut down and 20,000 workers laid off within two months

In the context of global economic recession, Cambodia's apparel industry exports have continued to decline, leading to a wave of factory closures and mass layoffs. In response, the Cambodian government has provided unemployment wage subsidies to workers from 21 companies in Jul. This means that, combined with the subsidies provided in Jun, the number of Cambodian apparel plants that have ceased production in the past two months has increased to 40, resulting in nearly 20,000 unemployed workers.

According to the data from the General Department of Customs and Excise of Cambodia, in the first half of 2023, the total value of Cambodia's apparel industry exports reached $3.727 billion, a 19% decrease compared to the same period last year. The United States is the largest market for Cambodia's apparel exports, with exports to the US reaching $4.236 billion in the first half of the year, a 8.9% decrease compared to the same period last year.

In terms of categories, in the first half of the year, Cambodia's knitted and apparel products accounted for $2.477 billion in exports, a 21.5% decrease compared to $3.157 billion in the same period last year. Non-knitted apparel exports reached $1.176 billion, a 13% decrease compared to $1.352 billion in the same period last year. The export value of other textile products was $74.69 million, a 22.1% year-on-year decrease. Additionally, the export value of footwear was $700 million, a 17.2% decrease compared to the same period last year.

According to the report, due to the uncertain factors brought about by the COVID-19 pandemic and the conflict between Russia and Ukraine, the consumption willingness of European and American countries has been affected. The surge in global energy has also pushed up production and transportation costs, and increased production costs for manufacturers. Many Cambodian apparel plants have stopped production or declared bankruptcy due to the decrease in orders received from international buyers. In the last year alone, about 500 factories were shut down, leaving nearly 60,000 workers unemployed. Currently, the Cambodian government is considering whether to extend the wage subsidy program due to lack of confidence in the expected recovery.