Despite a rise in fixed asset investments, job creation projections and total business expenditure experience a decline, says EDB.

Singapore saw an increase of 6.3% in fixed asset investment (FAI) commitments for 2024, totalling S$13.5 billion, with the majority of the investments coming from the electronics sector, as reported by the Economic Development Board (EDB) on February 6. This growth follows a significant drop in 2023, when FAI commitments stood at S$12.7 billion.

While FAI commitments saw an upward trend, the value-added contribution to Singapore’s GDP fell slightly, dropping from S$26.7 billion in 2023 to S$23.5 billion in 2024. This metric, which measures the direct impact on the country’s economy, encompasses wages and profits as key components. The EDB attributed this to a complex external operating environment, despite businesses benefiting from lower interest rates.

Job creation expectations also fell in 2024, with 18,700 positions anticipated over the next five years, a 6.7% decline compared to previous projections. However, Jacqueline Poh, managing director of the EDB, reassured that the goal of creating quality jobs for Singaporeans remains on track, with nearly two-thirds of these roles offering gross monthly wages exceeding S$5,000.

In addition, total business expenditure (TBE) per annum decreased by approximately 5.6%, amounting to S$8.4 billion. This decline was attributed to investments in headquarters and professional services.

The electronics sector dominated FAI commitments, with investments in semiconductors, biopharmaceuticals, and medical technologies taking centre stage. The semiconductor industry alone accounted for 57% of FAI, with investments soaring to around S$7.7 billion. Digital Industry Singapore successfully secured 26 AI centres of excellence in 2024, further boosting the country’s standing in AI innovation.

Biopharmaceuticals also saw significant growth, with S$2.2 billion in FAI investments driven by manufacturers expanding their capabilities in precision medicine, particularly in cancer treatments.

On the other hand, the chemicals sector experienced a sharp decline, with FAI commitments dropping from S$4.5 billion in 2023 to just S$366 million in 2024. EDB Chairman Png Cheong Boon noted that this reflects a discrepancy in long-term forecasts, as the semiconductor sector is currently benefiting from growth driven by AI and digitalisation, while the chemicals industry is facing excess supply and cautious investment.

Geographically, the United States remained the largest contributor to FAI, with over half of the investments coming from US-based companies. The share of investments from Europe stood at around 25%. Png acknowledged that future investments could be affected by potential tariffs, but stated it was too early to predict the exact impact.

The EDB also highlighted the transformation of services jobs, which make up 46% of the expected new roles. These jobs are increasingly focused on AI, digitalisation, sustainability, and automation. In total, manufacturing jobs will account for 37% of new positions, with the remainder in research and development and innovation.

Despite challenges, including geopolitical and macroeconomic uncertainties, the EDB remains optimistic about attracting investments in the coming years, with a focus on digitalisation, AI, and the green transition as key growth drivers. The agency is also dedicated to strengthening Singapore’s position as a global hub for innovation and startups.