Exports of clothing, footwear and travel goods (GFT) in the first five months of this year increased by 20.69 percent compared to the same period last year, generating $4.89 billion for the Kingdom, according to trade data released yesterday by the General Directorate of Customs of Saudi Arabia (GDCE).
GFT exports began to recover this year after a continuous decline for about 18 months from mid-2022, which came as a major relief to the Cambodian government, which had been providing financial support to workers in the sector who lost their jobs due to factory closures and work stoppages.
Cambodia’s economy relies heavily on the GFT sector not only for exports but also for the employment of about one million people. Of Cambodia’s total export revenue of $10 billion in the January-May 2024 period, about 48% came from GFT products.
According to the latest trade data, all segments of the GFT sector performed well in the first five months of 2024, with exports increasing compared to the same period last year.
As a result, exports of knitted garments and garment accessories stood at $2.18 billion, up 17.9% compared to January-May 2023. Non-knitted garments stood at $1.24 billion, up 32.2% year-on-year.
Footwear exports rose 10.1 percent to $615 million in the first five months of the year compared to a year ago, while exports of leather goods and travel goods increased 19.4 percent to $762 million in the same period.
Other textile products earned $87 million in January-May 2024, registering a growth of 38.8% over the same period last year.
In May 2024 alone, GFT exports brought in $1.19 billion for the country, up 31.84% compared to May 2023.
Ken Leu, secretary-general of the Textile, Apparel, Footwear and Travel Goods Association of Cambodia (TAFTAC), recently told the Khmer Times that the industry is on the road to recovery thanks to rising global demand. “It seemed like we hit bottom last year,” he said, suggesting the worst may be over.
According to the International Labour Organization (ILO), the GFT sector is one of the country’s largest job generators, directly employing nearly one million people. It accounts for 11 percent of the economy and contributed an estimated 50 percent of Cambodia’s real GDP growth in 2021.
As you know, amid global difficulties, Cambodia’s GFT exports are expected to fall 13.31 percent from $12.8 billion in 2022 to $11.09 billion in 2023, leading to work stoppages for many factory employees.
The decline in GFT goods exports that began in the second half of 2022 continued last year despite exports in almost all other sectors growing in 2023. The decline follows a decline in international demand for a variety of reasons, including geopolitical developments and inflationary pressures.
In March 2023, the Cambodian government began paying a monthly allowance of $40 to each GFT worker whose contract was suspended due to a slowdown in global demand. This was in addition to the $30 that factory management was providing to each suspended worker.