The export value of Laos' garments rose five per cent in the first six months of this year. This has come about mainly because of an expansion of industrial capacity. In 2014 garment exports is expected to bring in $226 million. Laos’ garment industry has been strengthened by the implementation of modern technology and the influx of new manufacturers. The country continues to be attractive because of its stable political environment and cheap labor force.
One of the main reasons why Laos is an attractive investment destination is that there are no strikes in the country unlike neighboring Vietnam and Cambodia. However, the garment industry in Laos is facing labor shortage as workers are moving to Thailand in search of higher wages. Labor shortage means manufacturers can’t keep up with demand. In fact, there is a high demand for Laos garments particularly in EU.
Thailand offers an attractive minimum wage of $279 US a month while in Laos the minimum wage is around $77 US per month. However, the Laos industry is benefitting from a rise in labor costs in China. International trading firms prefer to order their merchandise from countries with lower production costs such as Laos, Thailand and Vietnam.