SINGAPORE (ICIS)--Singapore’s chemical fixed asset investments (FAI) fell by 18.9% year on year to Singapore dollar (S$) 4.11bn in 2020, but overall FAI rose despite the challenges arising from the coronavirus pandemic, official data showed on Wednesday.
Singapore attracted investment commitments amounting to S$17.2bn in 2020, up from S$15.2bn in 2019, the Singapore Economic Development Board (EDB) said in a statement.
The overall FAI in 2020 exceeds the EDB’s medium- to long-term target of S$8-10bn.
Electronics and chemicals were the top two sources of investment commitments last year, accounting for 37.7% and 24% of the country's overall FAI, respectively.
“We are approaching the first half of 2021 with some caution. But if the COVID-19 situation stabilises in the coming months, there could be grounds for guarded optimism in the second half of 2021,” said Beh Swan Gin, the chairman of EDB.
According to the United Nations Conference on Trade and Development (UNCTAD), global foreign direct investment (FDI) flows are projected to have fallen by up to 40% in 2020.
“2021 will be challenging as countries around the world are competing aggressively for investments to revive their economies,” the EDB said.
“At the same time, companies are reviewing their strategies in view of the many changes in their operating context, and business decisions may take longer to materialise, with possible delays in project implementation,” it said.
Singapore’s GDP contracted by a record 5.8% year on year last year on disruptions caused by the coronavirus pandemic amid a sharp contraction in the construction, aviation and tourism sectors.
The construction sector shrank by 33.7% year on year in 2020, according to Ministry of Trade and Information (MTI) data.
Singapore’s total construction demand in 2021 is projected to range between S$23bn and S$28bn. This is an improvement from the projected S$21.3bn in 2020 during the ongoing COVID-19 pandemic, the Building and Construction Authority (BCA) said in a statement earlier this week.
The public sector is expected to drive construction demand in 2021, to between S$15bn and S$18bn with an anticipated stronger demand for public housing and infrastructure projects, the BCA said.
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Focus article by Nurluqman Suratman