Kingdom’s industrial sector to grow nearly 9% next year
Kingdom’s industrial sector to grow nearly 9% next year
Cambodia’s industrial sector is projected to grow by 8.6 percent in 2025, driven by a balanced expansion in the garment and non-garment sub-sectors, while the construction sub-sector is expected to grow at a slower pace compared to its pre-Covid-19 levels, according to the Royal Government’s assessment of the medium-term public financial framework for 2025.
The assessment was part of a statement on the draft Law on Finance for Management 2025, recently released by the Ministry of Economy and Finance.
The garment sub-sector is expected to sustain growth levels similar to those seen before the Covid-19 crisis, driven by improved global demand and the implementation of the Cambodia Footwear and Bag Development Strategy 2022–2027.
This strategy is anticipated to enhance the investment climate and competitiveness through increased labour productivity.
Meanwhile, the non-garment manufacturing sub-sector is projected to maintain robust growth due to continued external demand, which is expected to boost exports of non-garment manufacturing products.
Industries serving the domestic market are also forecast to grow, supported by key government measures aimed at promoting small and medium enterprises (SMEs) in priority sectors.
The food and beverage production sub-sector is also expected to continue its strong growth. However, the construction sub-sector is predicted to grow at a slower pace than usual, reflecting the anticipated sluggish recovery of foreign investment flows, particularly in construction projects related to tourism and trade. Housing construction, too, is projected to remain below pre-Covid-19 growth levels.
In the medium term, the construction sub-sector will likely be driven by real demand, particularly in the housing sector, supported by improvements in Cambodia’s demographic dividends.
Construction for industrial, factory, and other commercial activities is also expected to emerge as a new trend, bolstering growth in both the short and medium term.
Lim Heng, Vice President of the Cambodia Chamber of Commerce (CCC), told Khmer Times that the driving forces behind the projected increase in investment in 2024 are economic growth, political stability, and the peace guaranteed for investors in Cambodia.
These factors, combined with the new Cambodia Investment Law, make the country particularly attractive to investors, he added.
Heng noted that there has recently been a significant increase in investments registered with the CDC. Most of the listed companies are non-garment manufacturers, with investors primarily from China, Vietnam, Thailand, and other countries.
Companies investing in medium and heavy industries—such as infrastructure development, car assembly plants, agricultural processing, and tyre production—represent valuable contributions to Cambodia’s economy. These investments reduce the country’s reliance on the garment sector, he added.
“In the years ahead, we anticipate industrial investment will continue to rise due to significant infrastructure projects, including airports, shipping ports, and transport links with other countries and international markets—all of which are crucial factors,” he added.
Regarding the construction sector, Sam Soknoeun, president of SAM SN Group, told Khmer Times that the sector has attracted both local and foreign investors to Cambodia because most of the country’s development is linked to construction and real estate, including housing, entertainment, tourism, schools, hospitals, and more.
“I see that the real estate sector is gradually recovering and will likely return to its former strength because Cambodia enjoys political stability, peace, and economic security.
“Most importantly, Cambodia allows foreign investors to establish companies and own them 100 percent.
“These factors boost investor confidence in investing in Cambodia,” Soknoeun said.
According to a report on the outcomes of the Council for the Development of Cambodia’s (CDC) first official meeting, in 2024, the CDC approved 414 investment projects, marking an increase of 146 projects (an increase of 54 percent) compared to 2023.
These projects represented a total investment capital of $6.9 billion, an increase of $1.97 billion (an increase of 40 percent), and are expected to create approximately 330,000 jobs. Industrial investment projects accounted for the largest share, representing 69 percent of the total.
