National police spokesman Leonel Sauceda called the yesterday's attack in the northern city of San Pedro Sula "a massacre."
Authorities initially reported 15 dead, but three of the injured later died of their wounds, said assistant police commissioner Hector Ivan Mejia.
"Apparently the massacre was carried out as part of a turf battle between small-scale drug gangs, given that that neighborhood has conflicts because of the presence of gang members," Mejia said.
San Pedro Sula has been a hotbed of gunbattles between drug traffickers and among the country's Mara street gangs.
Sauceda said at least four men using assault rifles were involved in the attack at the small shoe factory. He said 23 employees were present and all were either killed or wounded.
Also yesterday, thousands of supporters of former President Manuel Zelaya staged street protests in the capital, Tegucigalpa, to demand the ousted leader's return as well as a 15 percent rise in the minimum wage, currently about USD 290 a month.
Zelaya was removed in a June 2009 coup, and his term expired in January. He was replaced by Porfirio Lobo, who won a fall presidential elections that had been scheduled before Zelaya's ouster.
Lobo has said Zelaya, who has been living in the Dominican Republic, is welcome to return to Honduras, but says he must face charges of fraud, usurping other institutions' powers and falsifying documents.