SINGAPORE, Jan 28 (Reuters) - Singapore attracted S$16 billion ($13 billion) in fixed asset investments last year, a 17 percent increase from 2011, but the city-state will likely attract fewer capital-intensive projects in coming years due to land and manpower constraints, its Economic Development Board (EDB) said on Monday.
EDB, Singapore’s main economic planning agency, said it expects to attract S$11 billion-13 billion worth of investments in new facilities, equipment and machinery this year as companies remain keen to expand in Southeast Asia at a time growth prospects in developed economies remain weak.
“We believe that this (forecast) is consistent with the level of capital-intensive investments that we expect to see over the medium term in keeping with Singapore’s land and labour constraints,” EDB managing director Yeoh Keat Chuan told reporters at a briefing.
“There continues to be land for industry to grow,” added EDB chairman Leo Yip. “(But) it is quite clear that we have reached a stage of our economic development where the rate of growth of land going forward cannot be the same as what we had experienced in the past.”
Singapore’s economy has been in the doldrums in the past three quarters, hurt by slowing global demand for electronics made worse by the strong local dollar and government measures to make it harder for firms to hire low-cost workers from abroad.
The city-state’s output of electronics fell 11.3 percent last year, with December’s year-on-year decline of 16.9 percent the largest since January 2012.
However, the EDB said the city-state’s electronics industry remains competitive, citing recent investments by the likes of Qualcomm, Samsung Electronics and Apple Inc . Around 30 percent of Singapore’s semiconductor production goes into components for smartphones and tablets - the sector’s star performer.
The electronics sector attracted fixed asset investments of S$6.2 billion last year, which when fully operational will create 2,900 skilled jobs and generate S$1.7 billion in value-added each year, the agency added.
“We should not forget this is a very cyclical industry. In 2010 for example we benefitted very much when the electronics sector in terms of VA (value added) grew by 50 percent and played a key role in Singapore’s economic recovery,” Yip said.
“If global leaders continue to invest in Singapore, it suggests to us that the sector by and large remains competitive,” he added.