EDB sees investments slowing further in the years ahead

Singapore

INVESTMENT commitments in Singapore is set to ease further from S$11.8 billion last year to S$9-11 billion in the next few years, according to the Economic Development Board.

Indicating that investment commitments are "moderating downwards", EDB chairman Beh Swan Gin said at a press conference on Monday that the forecast rests on the assumption of a benign global environment - and that there would be no major shocks in the years ahead.

While most of the investment commitments for 2015 are already in the bag, those beyond are still not secured, he said.

EDB said in a press statement that it expected "investment commitment numbers to continue with the trend since 2013, of a more moderate flow of investments".

While EDB attracted fixed asset investments of S$11.8 billion from foreign and local companies in 2014, meeting the upper end of its S$10-12 billion forecast, they fell short of 2013's S$12.1 billion.

Explaining the slowdown in the investment flows, EDB said: "This reflects our sharper focus on attracting projects that are in line with Singapore's stage of economic development, manpower policies and planned international commitments on carbon emissions."

For 2015, EDB also sees "greater uncertainty in the outlook for the global economy".

Last year's investment commitments will lead to 16,100 skilled jobs created when the projects are fully implemented, according to EDB. This was more than the 14,000-16,000 jobs projected.

The investments also reflected global companies' continued confidence in Singapore as a strategic hub to base their top decision-makers and key functions, it said.

Total business spending per annum came to S$7 billion in 2014, while expected value-added per annum came to S$12.5 billion. Both met forecasts.

The chemicals sector accounted for the single biggest chunk - S$2.6 billion - of 2014's investments. Electronics, which had the biggest share in 2013, saw investments tumble to S$1.6 billion from S$3.3 billion.

Only S$0.3 billion each, the smallest share, went into the education and healthcare services and the precision engineering sectors.

Investments in the infocomm & media sector jumped sharply from S$1.5 billion in 2013 to S$2.5 billion last year, making it the second biggest chunk of investments. The flow into headquarters and professional services rose from S$0.7 billion to S$1.2 billion.

All three of Singapore's top investors - the United States, Europe and Japan - cut back on capital spending in Singapore in 2014.

The US reduced its investments from US$3.7 billion in 2013 to S$1.8 billion. Europe trimmed its investments to S$3.1 billion, down from S$3.3 billion. The flow from Japan eased from S$0.7 billion to S$0.3 billion.

Chinese investments in Singapore crept up from S$0.3 billion in 2013 to S$0.5 billion last year.

Mr Beh said that the investments are cyclical and lumpy and the changes seen in the past two years did not amount to a trend. Seen over the past 5-10 years, the electronics and chemical sectors remain the two top draws for investors.

And the US is still the biggest investor in Singapore, follow closely by Europe and Japan.

Mr Beh also indicated that with China's economy growing slower, more investments are heading to South-east Asia - and Singapore, being the region's hub, is a top gainer.

The Asean Economic Community, which will be formed this year, should give investments into the region a further push, according to him.

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