PHNOM PENH — Cambodia’s industrial sector continues its rapid expansion, with 650 new enterprises registering in the first five months of 2026, pushing the Kingdom’s total registered factories and companies past 47,000 for the first time, according to the Ministry of Labour and Vocational Training (MLVT).
The new registrations have expanded the national workforce to nearly 2.3 million workers — a net increase of over 70,000 jobs compared to the end of 2025 — with women accounting for 57% of the total labour force at 1,309,190 workers.
Investment Momentum Builds
The surge in factory establishments reflects broader investment trends that have gained significant momentum since 2025. Last year, Cambodia approved 630 fixed-asset investment projects worth a record US$10 billion — a 45% increase over 2024. That momentum has continued into 2026, with the Council for the Development of Cambodia (CDC) approving 184 projects worth US$2.6 billion in the first four months alone.
China remains the dominant source of foreign direct investment, contributing US$1.17 billion — nearly 47% — of the US$2.5 billion in Q1 2026 approvals. Domestic investors accounted for 38%, followed by Malaysia at 8%.
“Through the policies of the Royal Government’s seventh mandate, we have seen a noticeable increase in new factory establishments and a massive demand for labour,” said H.E. Sun Mesa, MLVT Spokesperson. “We expect this momentum in both orders and exports to keep rising.”
Special Economic Zones as Growth Engines
Special Economic Zones (SEZs) have emerged as critical hubs for this expansion. The CDC reports that SEZs now cover over 8,300 hectares of active land and have attracted US$13.8 billion in total investment.
Two major SEZs operated by Royal Group — RGPPSEZ and RGKSEZ — saw employment rise 15.3% year-on-year to 58,532 workers as of April 2026, while combined exports from the zones jumped 39.5% to US$809 million during the first four months of the year. Deputy Prime Minister Sun Chanthol has highlighted that SEZs are attracting a “significant shift toward electronic components and high-tech industries,” signalling Cambodia’s move beyond traditional garment manufacturing.
Manufacturing and Exports Remain Resilient
The garment, footwear, and travel goods (GFT) sector — still the backbone of Cambodia’s industrial economy — generated US$3.75 billion in Q1 2026 exports, a 7.78% year-on-year increase that accounted for 46% of total exports. Knitted apparel led with US$1.58 billion, followed by non-knitted garments (US$1 billion), travel goods (US$544 million), and footwear (US$516 million).
The Asian Development Bank projects Cambodia’s economy to grow by 4.5% in 2026, with manufacturing output expected to expand by 7.3%, driven by strong garment orders and growing contributions from non-garment manufacturing including electrical components, tires, and furniture.
Labour Costs and Workforce Challenges
Cambodia’s statutory minimum wage for garment workers now stands at US$210 per month for 2026, up from US$208, though the increase has moderated significantly — just 1% — providing greater cost predictability for manufacturers. However, skills gaps remain a critical constraint, with employers consistently reporting challenges in finding qualified workers.
The government’s “Pentagonal Strategy” and investment reforms introduced under the seventh mandate continue to drive industrial diversification, with officials targeting higher-value industries including automotive components, electric vehicle systems, and healthcare technology.
