Singapore lowers its investment target for 2016 due to weak global demand

Investments to Singapore could continue to fall as businesses are likely to remain cautious due to global uncertainties.
Investments to Singapore could continue to fall as businesses are likely to remain cautious due to global uncertainties.PHOTO: ST FILE

SINGAPORE - Investments to Singapore could continue to fall as businesses are likely to remain cautious due to global uncertainties.

In its latest forecast, the Economic Development Board (EDB) said it expects to attract S$8 billion to S$10 billion worth of fixed asset investments (FAI) this year, which will create 20,000 to 22,000 skilled jobs.

This year's targets are down from S$11.5 billion worth of inbound investments last year, which are expected to eventually yield some 16,800 skilled jobs when the projects are fully implemented.

The FAI for 2015 exceeded the forecast range of S$9 billion to S$11 billion, said EDB on Tuesday (Feb 2) at media briefing, referring to the total capital investment in facilities, equipment and machinery.

Total business expenditure per annum (TBE) was S$5.6 billion, while the expected value-added per annum (VA) stood at S$12.3 billion for 2015, both falling within EDB's forcast ranges.

TBE refers to a company's increase in operating expenditure in Singapore (excluding depreciation), while VA measures the direct contribution to Singapore's gross domestic product excluding multiplier effects.

The 2015 numbers reflect the continued confidence and commitment of global companies in Singapore as a strategic location in Asia for key business functions, said EDB.

But all four indicators fell when compared with the 2014 numbers. The FAI in 2014 was S$11.8 billion, while 18,600 skilled jobs were created. The TBE stood at S$7 billion and the VA was S$12.5 billion.

For this year, EDB expects the level of investments to "remain moderate" due to uncertain global economic conditions.

The agency acknowledged that weak global demand is likely to continue to affect Singapore's manufacturing output. But it is confident about the underlying health of the manufacturing sector.

"We remain attractive (in the manufacturing sector) as you can see from the FAI that we're bringing in," said EDB chairman Beh Swan Gin.

But as Singapore is not a resource-rich economy, in terms of land and manpower, so it will also continue to be selective and targeted in its investment promotion, he added.