Singapore attracted a record high of S$22.5 billion in fixed asset investments last year, which is set to create more than 17,000 jobs in the coming years, the Economic Development Board (EDB) said.
In 2021, Singapore attracted S$11.8 billion in investments, down from S$17.2 billion committed in 2020.
The electronics sector drove last year’s performance, accounting for around two-thirds of the total fixed asset investment commitments.
“This outperformance relative to our goals was due to the exceptional influx of large manufacturing projects to meet the surge in global semiconductor demand, particularly during the first half of 2022,” said EDB managing director Jacqueline Poh at a media briefing.
Fixed asset investments refer to the incremental capital investment in facilities, equipment and machinery by a company. Last year’s fixed asset investments far exceeded the EDB’s targets of S$8 billion to S$10 billion per year in the medium to long term.
The EDB also warned of a challenging business outlook ahead.
Looking ahead, the EDB said it does not expect the same level of investments this year due to global macro uncertainties, intensifying competition for investments and a sharp slowdown in demand in the semiconductor industry.
EDB chairman Beh Swan Gin said higher interest rates will lead to dampened demand and a higher cost of capital.
“The two together will make many companies be more tentative about moving ahead with sizeable investments,” he said.
Additionally, many developed economies have introduced “very aggressive policies”.
