The Apparel Digest Report
While the global apparel industry navigated uncertainty in 2025, Cambodia and Bangladesh moved in sharply contrasting directions: one was marked by expansion and increased exports of the factories, the other had to contend with shutdowns, retrenchments, and declining industrial momentum.
Cambodia’s industrial sector is expanding rapidly, with GDP growth projected at 6.1% in 2024 driven by garment, footwear, and travel goods manufacturing. Conversely, Bangladesh is facing an industrial slowdown, with a 3.7% contraction in industrial production in the first half of FY24 due to weak consumption and structural constraints
Cambodia: Resilient Growth
Cambodia, the Southeast Asian nation in an area of 181,035 km, is a member of ASEAN that has total population of around 18 million.
Regardless of the global economic head winds, the Cambodian garment, footwear, and travel goods (GFT) sector continued to experience a healthy growth. In 2025, 310 new garment factories were established, bringing the total to 1,876, up 19 percent from 1,566 in 2024. Cambodia had more than 46,000 factories (most of them micro and small in size) and businesses across all sectors and had a workforce of approximately 2.14 million.
This growth was stimulated by exports. The GFT products of Cambodia hit $15.5 billion, garments reached 11.4billion, footwear 2.09billion and travel goods 2.02billion, showing a healthy annual growth. The United States, European Union, Canada and Japan were the key markets to which the company exported its products.
Officials highlighted the role of government initiatives, workforce development, and trade agreements, such as FTAs and the RCEP, in sustaining investor confidence. The sector’s expansion reflects both rising employment opportunities and steady foreign investment, reinforcing Cambodia’s position as a competitive regional manufacturer.
Bangladesh: Industrial Contraction and Job Loss
In Bangladesh, the picture was far less encouraging. Since August 2024, at least 327 factories in Gazipur, Savar, and Ashulia closed permanently or temporarily. Gazipur alone registered 188 closures which hit 115,379 workers with more than 90,000 permanently losing jobs. At Savar and Ashulia, 139 factories were closed and almost 40,000 people were laid off.
Even with 937 new factories opening nationwide in 2025, 5, the majority of these were small-scale businesses, which could not cover losses in the large export-based factories. Large-scale layoffs were witnessed in major industrial groups such as the Nassa Group and Beximco which increased the employment crisis.
Job losses triggered widespread economic knock-on effects. The industrial areas had worker quarters emptied, the local market and businesses experienced a reduction in demand, and most of the unemployed took up informal work like rickshaw driving, tailoring, or small-scale shops.
Bangladesh’s garment sector struggled under both domestic and international pressures. US tariff hikes disrupted orders and eroded margins, while high domestic production costs, inconsistent energy supply, trade frictions with India, airport fire losses, and tighter labor regulations added further operational strain.
Overall export growth was modest. The 2025 January-November garment shipments were 1.67 per cent and the overall export was 0.62 per cent. The U.S bound exports increased by 19.82 per cent in January- August but the EU results were varied, increasing by 13.7 per cent in January-September and slightly decreasing in July-November. There were disparities in the product-level trends where knitwear experienced pressure, and woven garments recorded slight gains.
Future challenges may involve the fact that Bangladesh will have graduated out of least developed country (LDC) status by 2026 and this may limit preferential trade access and further impact export-based industries. Weak private investment and a slowdown in credit growth limited opportunities for industrial expansion and new employment.
Continuous shutting down of factories and layoffs reduced the formal workforce, forcing many workers into low productivity informal work. Unemployment among graduates was still high, and the competition over the few jobs available in the government and the business sector was high. The governmental interventions such as interest-free loans to pay the unpaid wages helped a bit but failed to stop the wave of closures or to brighten the overall industrial confidence.
The growth in industrialization and export in Cambodia is indicative of a strong and more competitive manufacturing platform. Conversely, the garment centers of Bangladesh had to endure shrinkage, employment displacement and weak investment atmosphere.
The comparison highlights the manner in which policy stability, energy security, access to trade and investor confidence can influence divergent results despite being in the same industry region. The future movement of 2026 will be based on the ability of Bangladesh to stabilize the situation at home and rebuild buyer confidence and Cambodia strives to capitalize on its success and continue to grow its labour force.
AI Generated Comparison of Growth between Cambodia & Bangladesh
Cambodia: Industrial Expansion & Structural Shift
- Manufacturing Growth: Cambodia is successfully diversifying from labor-intensive to skill-driven industries, with the industrial sector’s share in GDP increasing from 27.7% in 2015 to 34.2% in 2019.
- Export Boom: Manufacturing exports remain strong, supported by closer supply-chain integration with China and Vietnam.
- Outlook: The country aims to transition to a high-middle-income status by 2030, with robust growth in sectors like tourism, real estate, and construction.
Bangladesh: Industrial Contraction & Economic Hurdles
- Industrial Slowdown: A 3.7% year-on-year drop in industrial production (IIP) was recorded in July-December 2023.
- Manufacturing Decline: Manufacturing of textiles, pharmaceuticals, and transport equipment declined due to low private consumption and rising costs.
- Challenges: The sector faces challenges including limited diversification, weak port efficiency, and energy supply constraints, hindering its competitiveness despite some gains in leather and footwear.
While Cambodia is accelerating its industrialization to meet Vision 2030, Bangladesh is struggling with immediate economic headwinds, highlighting a growing disparity in their economic trajectories within Asia.
