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AsiaInspection said the proportion of non compliant firms rose to 30 percent, compared to 27 percent in 2016.
The audit firm uses a range of metrics including working hours, wages, quality and factory safety to score suppliers out of 10.
Working hours and wages were the areas where most violations took place.
The top performing industry was food containers and bodycare, where factories had average audit scores of eight.
The structural safety of factories gave cause for concern as it continues to deteriorate, with the percentage of compliant factories dropping to 30.5 percent from 37 percent in 2016 and 41 percent in 2015.
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