GENEVA — Cambodia’s apparel and textile industry is on the rise, a new report said.

The study, released last week by the International Labor Organization, said Cambodia reported a 9.6 percent increase in exports to $2.1 billion in 2005, along with gains in jobs and foreign investment. The U.S. was the biggest export market, accounting for more than 71 percent of all apparel exports, while exports to Europe took a 22 percent share.

“This data is very encouraging … we are seeing a steady growth in the sector,” said Ross Harvey, chief technical advisor for the ILO and author of the report “Better Factories, Cambodia.”

The gains were attributed to the end of the global quota regime in January 2005, as well as improvements in working conditions in the country’s factories. The quantity of apparel shipments to the U.S. increased by just over 10 percent, but notched a 20 percent boost in value terms, the report said. Cambodian exports to Europe, however, posted a 15 percent decline.

The ILO has been running the “Better Factories, Cambodia” program in an effort to improve working conditions in garment factories.

About 30,000 jobs were created between January 2005 and April 2006, a gain of 11 percent, the study said. The number of employees in the industry at the end of April stood at 293,600, the ILO estimated. During 2005, average wages in Cambodia’s apparel sector remained constant at $72 per month, which was above the minimum wage of $45 per month, it said.

While Cambodian ownership of apparel and textile factories declined during the year, foreign ownership was on the rise. Taiwan in particular has emerged as a key player in the Cambodian market. Taiwan-based entities now own more than 25 percent of all factories in the sector, slightly above the stake owned by Hong Kong-based investors. Chinese and South Korean-based investors also own significant stakes in the Cambodian apparel industry, the report notes.

Cambodian manufacturers “are reporting increased pricing pressure,” the report said. In 2005, the price per piece exported fell by 4.47 percent. However, U.S. prices dropped 3.2 percent, compared with the 0.6 percent decline in European prices for Cambodian apparel.

This story first appeared in the June 6, 2006 issue of WWD. Subscribe Today.

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