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The garment industry is an important sector of the economy of Portugal and has been expanding since 1990 in terms of the volume of business conducted. Most companies are small and productivity is low. In the past the main basis of Portugal's competitive advantage has been low wages. This may not be sustainable in the future — this represents the biggest challenge faced by the industry. Most companies are well equipped but commercial design and industrial pattern making are perceived as weak points. The domestic market is rather small and most companies focus on export markets.

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