2016 investment commitments slip to S$9.4b but still on target

Singapore

INVESTMENT commitments in Singapore last year were on target - though they fell from 2015 and were the lowest in recent years, said the Economic Development Board (EDB) on Thursday.

And despite economic uncertainties, the investment-promotion agency expects to draw a "comparable" S$8 billion to S$10 billion in fixed-asset investments (FAI) again this year.

It said in a statement that the outlook predicts "steady growth in Asia and Singapore's resilience as a strategic location to drive growth and innovation".

EDB chairman Beh Swan Gin, speaking at the agency's annual "Year in Review" press conference, said: "We will continue to seize economic opportunities brought about by growth sectors, including advanced manufacturing, hub services and digitalisation and help Singaporeans take up new jobs with skills upgrading programmes."

He added: "Despite the uncertain operating environment in 2017, the level of investment interests from companies remain stable.

"We will also focus on transforming existing industries to boost our economic competitiveness and uncover new business opportunities for companies in Singapore."

FAI slipped from S$11.5 billion in 2015 to US$9.4 billion last year, but EDB noted that last year's figure was still at the upper end of its forecast of S$8 billion to S$10 billion.

The agency's managing director Yeoh Keat Chuan said that the results were "very much in keeping with the medium-term sustainable levels" of Singapore's economic growth.

The fall from 2015 was partly the result of a big drop in FAI by US firms, the investments made by which tumbled from S$7 billion in 2015 to S$3.5 billion last year.

But Mr Beh noted that the US's FAI in 2015 had been unusually high, and that last year's level was more usual.

Still, the US remained Singapore's biggest investor last year. The second biggest investors (S$2.2 billion) were homegrown firms, followed by European (S$1.2 billion) and Japanese (S$0.7 billion) firms.

The FAI in 2016 are likely to create 20,100 well-paying jobs, higher than the 16,800 jobs expected in 2015. This also met EDB's forecast of between 20,000 and 22,000 jobs; the 2017 FAI (forecast) is expected create 19,000 to 21,000 jobs.

Also on target last year was the expected value-added (VA) per annum, which came to S$12.9 billion. The forecast had been at between S$12 billion and S$14 billion.

Total business expenditure (TBE) per annum was S$8.3 billion, which over-shot the target range of S$5.5 billion to S$6.5 billion. EDB said this was due partly to large-scale shipyard projects committed.

It expects TBE to return to earlier levels (S$5 billion to S$7 billion) "as the large shipyard projects committed in 2016 have long investment cycles and will not recur in the near future".

TBE refers to commitments by firms setting up regional headquarters, research and development labs as well as other facilities in Singapore. In return for tax breaks, these firms must agree to spend a certain amount of money each year on salaries, rent and local procurements, among other things.

EDB said in the year ahead it would seek to consolidate Singapore's position as a high-value manufacturing base by capturing opportunities in advanced manufacturing.

It said in its statement: "We will do so by anchoring lead adopters of advanced manufacturing in Singapore, while building up an ecosystem of suppliers and enablers to develop technologies and solutions.

"In addition, EDB will partner other government agencies such as SkillsFuture Singapore and Workforce Singapore, and companies and institutes of higher learning to ensure that there is a pipeline of fresh-graduate and mid-career entrants into the manufacturing workforce."