SINGAPORE: Singapore attracted a report excessive of S$22.5 billion in mounted asset investments final yr, which is about to create greater than 17,000 jobs within the coming years, the Financial Growth Board (EDB) mentioned on Thursday (Feb 9).
In 2021, Singapore attracted S$11.8 billion in investments, down from S$17.2 billion dedicated in 2020.
The electronics sector drove final yr’s efficiency, accounting for round two-thirds of the whole mounted asset funding commitments.
“This outperformance relative to our goals was due to the exceptional influx of large manufacturing projects to meet the surge in global semiconductor demand, particularly during the first half of 2022,” mentioned EDB managing director Jacqueline Poh at a media briefing.
Mounted asset investments confer with the incremental capital funding in services, gear and equipment by an organization. Final yr’s mounted asset investments far exceeded the EDB’s targets of S$8 billion to S$10 billion per yr within the medium to long run.
“We are now at the end of this semiconductor supercycle and we are seeing chip demand soften. So I would like to reiterate we don’t expect this level of investments to persist in the near term,” she mentioned.
The EDB additionally warned of a difficult enterprise outlook forward.
When the brand new initiatives are applied absolutely within the coming years, they’re anticipated to create 17,113 new jobs, and contribute S$20.6 billion to Singapore’s financial system per yr.
Nearly all of jobs created will probably be in hub and enterprise companies, whereas 27 per cent will probably be in superior manufacturing and one other 12 per cent will probably be in innovation.
Singapore additionally secured S$6.2 billion in whole enterprise expenditure final yr, increased than the S$5.2 billion in 2021. Each figures are throughout the EDB’s targets of between S$5 billion and S$7 billion.
The headquarters {and professional} companies sector accounted for round half of whole enterprise expenditure, which refers to an organization’s incremental annual working expenditure in Singapore, together with wages and rental.
Infocommunications and media made the subsequent largest commitments in whole enterprise expenditure, representing greater than 20 per cent of final yr’s figures.
“More global businesses clearly use Singapore as a hub to build resilience in their operations, as well as to access regional and global markets,” Ms Poh mentioned.
INVESTMENT OUTLOOK, OPPORTUNITIES
Wanting forward, the EDB mentioned it doesn’t count on the identical degree of investments this yr on account of international macro uncertainties, intensifying competitors for investments and a pointy slowdown in demand within the semiconductor business.
EDB chairman Beh Swan Gin mentioned increased rates of interest will result in dampened demand and a better value of capital.
“The two together will make many companies be more tentative about moving ahead with sizeable investments,” he mentioned.
Moreover, many developed economies have launched “very aggressive policies”.
“The US, for instance, introduced the Chips Act, they introduced the Inflation Reduction Act. And these are very attractive incentives that will compete for the same sorts of investments that Singapore would be interested in,” he mentioned.
Singapore’s personal dedication to decarbonisation additionally means it must be extra selective in attracting investments which can be power intensive.
That mentioned, the EDB sees alternatives in excessive progress and excessive value-add sectors comparable to agri-food and superior manufacturing for electronics, healthcare and aerospace.
Singapore can also be strengthening its capabilities as a provide chain management tower, the company mentioned.
SINGAPORE’S ATTRACTIVENESS
Singapore nonetheless has many benefits, comparable to stability and belief within the nation, mentioned Dr Beh.
“How we conducted ourselves through COVID-19 has only reinforced this reputation for stability,” he mentioned.
Singapore’s financial fundamentals and popularity for being dependable and impartial helped to seize “quality investments from diverse sources”, EDB mentioned.
The US accounted for 50.6 per cent of final yr’s funding commitments, adopted by 21.2 per cent from Europe.
Singapore’s location in Southeast Asia can also be a “huge advantage,” Dr Beh mentioned. “We are in the middle of a growing region.”
The company has seen rising curiosity from companies from China and different northeast Asian economies that wish to entry south and southeast Asia, EDB mentioned.
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