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EDB sees S$8b to S$10b in fixed asset investments for 2019
DESPITE slowing global growth, the Republic is expected to attract S$8 billion to S$10 billion in fixed asset investment (FAI) commitments in 2019, in line with previous years, the Singapore Economic Development Board (EDB) said at its year-in-review briefing on Thursday.
This is expected to generate some 16,000 to 18,000 jobs, in line with 2018's prediction but a step down from the 22,500 expected jobs in 2017. Total business expenditure per annum from these projects is expected to be S$5 billion to S$7 billion, similar to 2018's forecast.
Global uncertainties notwithstanding, "investment decisions are generally made over the longer-term" and the EDB expects investment commitment numbers to be sustained in the coming year, said EDB managing director Chng Kai Fong.
Asked if trade tensions between the United States and China had affected investment decisions, EDB chairman Beh Swan Gin said that it is natural that some firms will defer investments when uncertainty is high.
"We have seen some large capex investments where companies have decided to defer it," he noted. But these were not deferred "indefinitely", he added, given that there is real demand for these projects.
If the trade tensions spur further diversification of supply chains to South-east Asia, then both the region and Singapore will benefit, he said.
Mr Chng pointed out that it is "still early days" for major structural shifts in investment, but added that moving to Asean is "not just a defensive play" - it is also an offensive play, as there are important opportunities in Asean.
Asean is one of five priorities that the EDB will focus on for 2019, "or indeed the next three to five years", said Mr Chng, with the other four being advanced manufacturing, digital, innovation, and growing new industry clusters such as mobility.
In a panel discussion at the event, Boston Consulting Group partner and managing director for Singapore Aparna Bharadwaj said Asean was "one of the most exciting consumer regions", noting that its narrative is no longer just one of a rising middle class, but also a new mass affluent segment. Singapore is ideal for firms seeking to be in touch with emerging markets while benefiting from an established framework, she added.
On the digital front, the EDB's focus is not restricted to technology firms but extends across industries, with firms from sectors such as finance, healthcare, logistics and consumer having set up digital centres of excellence here, said assistant managing director Kiren Kumar. He added that the jobs created are not just for programmers or similar "technologists", but also for those in creative fields and broader "strategists".
In 2018, Singapore attracted S$10.9 billion in fixed asset investments, exceeding the EDB's forecast of S$8 billion to S$10 billion for that year, and beating 2017's figure of S$9.4 billion.
When fully implemented, these projects will create 17,400 new jobs, within the original forecast of 16,000 to 18,000 new jobs, and are expected to contribute S$13.6 billion in value-added per annum. Total business expenditure expected per annum is S$6.2 billion.
The electronics industry remained the top source of investment commitments in 2018, with almost S$3.09 billion in FAI secured.
Infocommunications and media came in second with almost S$2 billion, representing almost a fifth of 2018's FAI commitments - a huge leap from 5 per cent in 2017.
Research and development (R&D) was third with S$1.58 billion. This represented 14.5 per cent of FAI commitments, almost twice its 7.5 per cent share in 2017.
R&D investments were also the top source of jobs, with an estimated 3,872 jobs expected to be created. Engineering and environmental services, which had the fourth-largest share of FAI, came second with 3,795 expected new jobs.
The US, Europe, and Singapore remained the top three sources of FAI commitments, accounting for 50.3 per cent, 22.4 per cent, and 15.8 per cent respectively.