Chemicals sector leads fixed asset investments, with a rise in research and development contributions
In 2023, Singapore attracted S$12.7 billion in fixed asset investment (FAI) commitments, a significant drop of 44% from the record S$22.5 billion in 2022, according to the Singapore Economic Development Board (EDB). Despite the decline, the total remained above the EDB’s medium-to-long-term target range of S$8 billion to S$10 billion, reflecting a strong level of investment for the country’s economy.
The chemicals sector emerged as the largest contributor to FAI in 2023, surpassing the electronics sector, which had previously dominated investments. The chemicals sector now holds 35.6% of FAI commitments, up from just 3.8% in 2022, marking a significant shift in sectoral investment patterns. Meanwhile, electronics dropped to second place, contributing 24.2% of FAI.
Research and development (R&D) investments also grew, accounting for 16.6% of the total FAI in 2023, up from 6.3% the previous year. This increase reflects more multinational corporations expanding their innovation activities in Singapore.
Notably, infocommunications and media did not contribute to FAI in 2023, down from 9.9% in 2022, due to a moratorium on new data centre projects that lasted until 2023. With the lifting of this moratorium, data centre investments are expected to rebound in the coming years.
In terms of business expenditure (TBE), investments amounted to S$8.9 billion, surpassing the EDB’s target of S$5 billion to S$7 billion and demonstrating growth from the previous year’s S$6.2 billion. Additionally, 20,045 jobs are expected to be created as a result of the investments, up from 17,113 jobs in 2022.
The US remained the top source of FAI commitments, contributing 51.9%, followed by Europe at 24.8%.
To stay competitive, EDB plans to focus on strengthening Singapore’s position in advanced manufacturing, semiconductors, healthcare, and aerospace, while exploring emerging growth areas such as the green economy, artificial intelligence (AI), and precision medicine.
