Big foreign investments in Singapore are set to keep falling this year, given the weaker global economy.
But the number of skilled jobs this year's investments will generate is set to grow considerably.
The Economic Development Board (EDB) has pegged its latest forecast for fixed asset investments in Singapore this year at $8 billion to $10 billion - the lowest level in the past decade.
This year's target for the total capital investment in facilities, equipment and machinery is down from the $11.5 billion pulled in last year.
Last year's inbound investments exceeded the forecast range of $9 billion to $11 billion, said the EDB yesterday. This shows that Singapore is still favoured by global companies as a strategic location in Asia for key business functions.
The forecast also reflects the EDB's focus on being selective in attracting more resource-efficient investments aligned with Singapore's stage of economic development, said EDB managing director Yeoh Keat Chuan at a media briefing.
The new investments could yield 20,000 to 22,000 skilled jobs, above the 16,800 jobs that came with last year's investments.
EDB expects this year's level of investments to "remain moderate" due to uncertain global economic conditions. Singapore's economy grew 2.1 per cent last year - the slowest expansion since 2009 - with the economy expected to grow between 1 per cent and 3 per cent this year.
The agency acknowledged that weak global demand is likely to keep hurting manufacturing output here.
But EDB chairman Beh Swan Gin is confident that Singapore's underlying competitiveness, including in manufacturing, is strong.
"It may appear as if manufacturing is doing badly, if you look at its share of the gross domestic product," said Mr Beh, referring to the sector's drop from a 27.8 per cent share of the economy in 2005 to 18.4 per cent in 2013 and 2014. "If you look at the value-added contribution from manufacturing, it actually continues to grow."
Mr Beh said EDB is working to attract speciality chemical makers, for example, as they may create higher added value but need less land.
UOB economist Francis Tan said making higher value-added goods such as pharmaceutical products can make Singapore's manufacturing sector more resilient.
Acumen Research Laboratories founder Ong Siew Hwa, whose firm makes diagnostic test kits, agreed, saying such manufacturing based on intellectual property rights will help Singapore compete globally.
Sentiment in the manufacturing sector stays weak, with the Purchasing Managers' Index shrinking for a seventh straight month in January.