Singapore still hot investment choice for MNCs but rising costs a concern

Over a third of global multinational companies plan to raise their investment in Singapore in 2013, making this the seventh most popular investment destination in Asia, a new survey has shown.

But the Asia Business Outlook Survey by The Economist Corporate Network also reveals that Singapore is losing its shine as a place for running regional management centres.

"Our survey shows that companies are increasingly concerned about issues such as inflation, rising costs, expensive property prices, and shortages of staff," said Mr Justin Wood, the Southeast Asia director at The Economist Corporate Network.

The survey received responses from 207 senior executives at large firms across Asia.

Among those based in Singapore, more than half said that rising costs are either a major constraint or a reason to relocate, while 38 per cent considered property prices as having the same impact.

The survey also showed that executives are buoyant about Asia in general, with almost half of the respondents saying expectations for their business in the region have risen over the past 12 months.

In contrast, only 15 per cent said that their business expectations had fallen over the same period.

Companies are also predicting that sales will grow at a faster rate this year in every Asia Pacific market except Japan.