Singapore sees little growth in fixed-asset investments this year after commitments fell to the lowest level since at least 2007, the Economic Development Board said.
Capital investment in facilities and equipment planned over the next five years stood at S$9.4 billion ($6.7 billion) last year and should stabilise at around S$8 billion to S$10 billion in coming years, Beh Swan Gin, chairman of the EDB, told reporters in Singapore on Thursday. The EDB didn’t provide data for the period before 2007.
“We believe that Singapore is attracting its fair share of investment and will remain competitive,” he said. “There will be some years when there will be more, but this is a sustainable number,” he said, referring to the forecast for this year.
Weakening investment adds to risks the Southeast Asian nation is facing as rising protectionism threatens the export-dependent economy. Investments in the past 10 years were driven by petrochemical companies and land-scarce Singapore doesn’t have room for many more projects of that scale, Beh said.
Investments in less space-demanding industries, such as pharmaceuticals, should stay at healthy levels in the foreseeable future, he said.
The EDB is a government agency in charge of enhancing the city-state’s position as a global business centre, with a traditional focus on the manufacturing industry.
Singapore last year posted its worst economic performance since the 2009 global financial crisis. The government is forecasting economic growth of between 1% and 3% this year, but Beh said that growth over 2% in 2017 may be hard to achieve.
“I think in 2017 there’s still somewhat of a drag from, for instance, the marine and oil sector, from real estate,” Beh said. For the medium term, growth of 2% to 3% is sustainable, he said.
Manufacturing picked up towards the end of last year on the back of a recovery in electronic exports. Estimates for the first nine months of last year show productivity in the manufacturing sector rose by 4.2% from the same period of 2015, the highest of any industry in Singapore, EDB Managing Director Yeoh Keat Chuan said. That partly reflects job losses but also improvements in operations, he said.
Based on 2016 investment commitments, Singapore will create 6,000 manufacturing jobs over the next five years, according to the EDB. Beh said this may not necessarily lead to net job creation, as job losses may continue in some companies.