Singapore scored above-target S$11.8b in fixed asset investment commitments in 2021

SINGAPORE secured S$11.8 billion in fixed asset investment (FAI) commitments in 2021, down from the previous year's decade-long high of S$17.2 billion, but still above the Singapore Economic Development Board's (EDB) medium- to long-term target range of S$8 billion to S$10 billion.

At S$16.8 billion, expected value-added per annum for the projects was similarly down from 2020 - when it had been S$31.2 billion - but still above the target range of S$12 billion to S$14 billion.

"The numbers in 2020 were actually quite exceptional and we did not expect to repeat that in 2021," said EDB chairman Beh Swan Gin at the statutory board's year-in-review on Wednesday (Jan 26).

The 2021 investment numbers were on par with the 5-year annual average before 2020, noted EDB managing director Jacqueline Poh.

Large manufacturing projects from semiconductor and biotechnology firms accounted for more than half of FAI in 2021, with both sectors expected to remain key for investment commitments in the coming years.

Electronics remained the top industry, accounting for 42.3 per cent of FAI. Biomedical manufacturing widened its share to 15 per cent, displacing chemicals as the industry with the second-largest share.

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Asked about the possible implications of the semiconductor cycle easing off, Dr Beh replied that EDB remains optimistic about the sector's prospects "in the next 12, maybe even 24 months".

"We continue to see good interest from companies to look at new investments or to expand their operations here in Singapore," he said.

"Many of the industry leaders see that the shortage of supply will continue to be there until 2023, if not 2024," he added, while longer-term projections "continue to be very positive".

"We expect that semiconductors will still be a strong contributor to our investment commitments in the next few years to come," said Poh.

As for biotech and medtech, EDB is "very optimistic about growth" in those sectors in 2022, she said: "We very much hope to have some announcements to be made during the course of the year."

For expected value-added, R&D accounted for the largest share at 27.8 per cent, followed by infocommunications and media at 26.3 per cent, and headquarters and professional services at 17 per cent.

Total business expenditure per annum from the projects secured in 2021 is expected to be S$5.2 billion, down from S$6.8 billion in 2020 but still within the target range of S$5 billion to S$7 billion.

The growth of the digital economy contributed significantly to total business expenditure commitments, noted EDB. Over the last decade, the digital sector has also almost doubled its share of jobs created in EDB-related investment.

A total of 17,376 jobs are expected to be created by investments secured in 2021, within the target range of 16,000 to 18,000. Of these, 22 per cent are expected to be digital roles.

Production jobs account for just over a third, with roughly another third from business and commercial services. The remaining 11 per cent are innovation jobs.

About 70 per cent of the total jobs will be for professionals, managers, executives and technicians (PMETs), and the majority of these are expected to be taken up by locals, said Poh.

The investment commitments secured in 2021 reaffirm "Singapore's standing as the preferred location in Asia for companies to site their regional headquarters and global headquarters activities", said Dr Beh.

This is despite how pandemic travel restrictions have "dampened the ability of companies to think about expanding their offices and their regional headquarters", he noted.

The United States remained by far the largest source of FAI commitments, increasing its share to 67.1 per cent in 2021, up from 53.4 per cent in 2020.

Europe remained the second source, accounting for 13.1 per cent.

EDB said it will continue to focus on high-growth and high-value-added sectors that create good jobs and careers. It noted that digitalisation will "remain a vibrant source of new concepts and business models"; the ageing population's healthcare needs will fuel investments in biotech and medtech; and the sustainability drive means opportunities in decarbonising existing industries and growing new green enterprises.

READ MORE: 40 new ventures launched so far through EDB's corporate venture initiatives