H2 apparel export forecasts dim after Aug blow
H2 apparel export forecasts dim after Aug blow
Cambodia netted nearly $6.468 billion from the export of “articles of apparel and clothing accessories” in the first eight months of 2022, up by 28.79 per cent from the $5.022 billion recorded in January-August 2021, according to the General Department of Customs and Excise (GDCE).
These goods correspond to chapters 61 and 62 of the harmonised tariff schedule, the former of which covers items that are “knitted or crocheted”, and the latter those that are neither.
Exports of items under Chapter 61 amounted to $4.598 billion, rising by 27.24 per cent year-on-year, while the analogous figure for Chapter 62 was $1.870 billion, up by 32.78 per cent.
“Articles of apparel and clothing accessories” accounted for 41.35 per cent of total January-August exports, or $15.642 billion, inching up by just 0.81 percentage points year-on-year.
However, although exports in August alone were up 0.46 per cent year-on-year, at $848.20 million, this represented a 23.55 per cent drop from July’s figure, which had risen 27.82 per cent over June.
Kaing Monika, secretary-general of the Garment Manufacturers Association in Cambodia (GMAC), the Kingdom’s apex garment makers’ body, confirmed to The Post on September 13 that the industry started seeing a reduction in orders last month, reversing a seven-month long trend of increases, due to global economic uncertainty and a slew of other hurdles.
“This situation may prolong until the end of the year, or longer,” he predicted.
Monika noted that the garment sector’s top markets are, in order, the US, EU, Japan, Canada and the UK. “The situation in EU is not good at the moment,” he remarked.
Royal Academy of Cambodia economics researcher Ky Sereyvath credited the uptick in garment exports to relatively normal production in the Kingdom as exporters elsewhere face Covid-linked disruptions. However, orders in general will not see positive results in the second half (H2) due to fallout from the Ukraine conflict, he said citing GMAC.
Still, there has been some reprieve from the Covid-19 crisis and slowdown in global economic growth tied to the turmoil in Ukraine, Sereyvath said with a hint of optimism.
“In 2023, I expect the situation surrounding garment orders from Cambodia to improve somewhat, compared to the second half of 2022, as the crisis in Europe seems to have eased to some extent,” he added.
The Council for the Development of Cambodia, the government’s highest decision-making body for large-scale investments, appears to share Sereyvath’s sentiment, consistently noting that the Kingdom is still well-able to lure in a steady stream of investors into garments and other areas, even as the world deals with significant lingering Covid issues.
Last year, Cambodia exported “articles of apparel and clothing accessories” worth $8.018 billion, marking an 8.53 per cent increase over the $7.387 billion logged in 2020, according to the GDCE.
