About $10b FDI expected over next 12 months but fewer jobs
But number of jobs created is forecast to be lower than in previous years
The changing nature of the local economy and workforce will likely mean the amount of foreign direct investment here will remain similar to that in recent years, although with fewer jobs created.
About $8 billion to $10 billion is expected to flow in over the next 12 months - much like in the previous two years, the Economic Development Board (EDB) said yesterday.
But that will likely result in 16,000 to 18,000 new jobs being created - down a few thousand on the past two years, due in part to slower growth in the local workforce and the differing nature of the jobs being generated.
These now tend to be higher-skilled, higher-value positions in higher-tech industries, EDB managing director Chng Kai Fong said at the end-of-year review yesterday.
He told The Straits Times: "Even as we create fewer jobs, more Singaporeans take up these jobs and they are better-quality jobs."
Singapore attracted $9.4 billion in fixed-asset investment last year, which was within the EDB's forecast of $8 billion to $10 billion.
When fully implemented, these projects will create 22,500 new jobs, exceeding the original forecast of 19,000 to 21,000 new positions.
The projects are expected to contribute $17.2 billion in value-add a year, up from $12.9 billion for projects committed in 2016.
While the EDB's outlook this year is "cautiously optimistic", a major source of uncertainty is the impact of corporate tax cuts in the United States. "Our preliminary assessment is that it could be harder to attract investments that are meant to supply into the US," said Mr Chng.
The US was Singapore's largest investor last year, accounting for 38.3 per cent of investment. Europe was next at 28.7 per cent, with China, Japan and home-grown firms taking a further 9.6 per cent share each.
The rise in China's share of investment was particularly stark, up from just 1.1 per cent in 2016.
EDB chairman Beh Swan Gin said year-on-year changes may not reflect underlying trends.
Since 2008, inbound investment has created more than 20,000 new jobs a year except in 2014, when 18,600 were generated, and in 2015, with 16,800 positions added.
The new jobs generated this year will be in areas like advanced manufacturing and the digital sector.
Dr Beh noted that the digital sector has been a major driver of investment and new jobs, not just with digital firms setting up here, but with traditional companies locating their digital hubs in Singapore too.