More Japanese companies to expand in S’pore, rising wages the top business concern: Survey

SINGAPORE - More than 90 per cent of Japanese companies in Singapore will maintain their present operations or have plans to expand their operations in Singapore.

These were among the findings from an annual survey on business conditions of Japanese companies in the Asia-Pacific region, including Singapore. It was conducted by the Japan External Trade Organisation (Jetro), a Japanese government-related organisation that promotes mutually beneficial trade and investment relations.

According to the survey, 44.6 per cent of Japanese companies in Singapore are planning an expansion here, up from the 41.3 per cent in the 2021 survey.

Meanwhile, 52.6 per cent of the Japanese companies polled said they would maintain their current operations.

The country that Japanese companies are planning to expand the most in is India, with 72.5 per cent of firms polled planning to expand their businesses there.

This is followed by Bangladesh (71.6 per cent) and Vietnam (60 per cent).

The top business concerns among Japanese companies across the Asia-Pacific region, as well as Singapore, include the increase in business costs, with rising wages as the biggest concern (70.9 per cent). Also, 69 per cent of companies polled were worried about increased procurement costs.

Other concerns include exchange rate fluctuation, growing market share of competitors, and difficulty getting new clients.

Despite rising wages, 39 per cent of companies polled in Singapore said they will increase the number of local employees in the next one to two years.

Environmentally conscious business operations have become more important to companies, with 46.4 per cent of Japanese companies here making efforts towards decarbonisation, while 26.4 per cent are planning to do the same.

The survey, which has been ongoing since 1987, was conducted from Aug 22 to Sept 21, 2022, with valid responses from 4,392 firms. Out of these firms, 404 firms are from Singapore.