PORT LOUIS (Reuters) - Market diversification and an improved economic outlook in key export destinations will see Mauritius' textile sector return to positive growth next year, the country's industry minister said on Tuesday 24 November.

The sector is seen shrinking by four percent this year, compared with growth of 8.5 percent in 2007, as consumers abroad spend less on clothing.

"We are diversifying our market in Europe and also in Asia, so we expect the textile sector to grow by more than 1 percent next year," Dharam Gokhool told Reuters.

A traditional cornerstone of the island's economy, textiles contributed 5.4 percent of gross domestic product in 2008 compared to 6.5 percent in 2007, according to Mauritius Chamber of Commerce and Industry data.

The sector, a principal target of December's $340 million stimulus package, also provides 11 percent of Mauritius' jobs.

Gokhool said it was necessary to improve competitiveness across the nation's industrial sector to ensure exporters were well-positioned to take advantage of opportunities as the global economy recovered.

"That can be done by improving productivity, efficiency and also going for high value added markets," he said.