Singapore stays attractive for MNCs but ...

ALL content used in this not-for-profit blog remain the property of their respective owners.
http://www.todayonline.com/Business/EDC130108-0000014/Singapore-stays-attractive-but-rising-costs,-labour-shortages-bite

Singapore remains an attractive investment destination for multinational companies, but its role as a host for corporate regional headquarters is increasingly being undermined by concerns over rising costs, soaring property prices and labour shortages, according to the latest annual Asia Business Outlook Survey by the Economist Corporate Network.

The survey showed 52 per cent of respondents with regional headquarters in Singapore citing cost of living as a major issue or a cause for them to relocate.

Rising property prices were the second-biggest issue, drawing concerns from 38 per cent of respondents, while 34 per cent said staff shortages would hurt their operations or force them to relocate.

The survey polled 207 business respondents in the Asia-Pacific region, of which about 80 per cent of the respondents were American or European corporations.

Mr Justin Wood, South-east Asia Director at the Economist Corporate Network, told TODAY: "Big multinationals are by no means abandoning Singapore, but the country is bound to lose competitiveness in certain areas as wages rise and the Government moves its industries up the value chain.

The Economist Corporate Network survey shows that only 34.8 per cent of multinationals in Singapore plan to increase their investment here this year.

As a result, Singapore dropped two places to seventh in the survey's investment priority ranking this year, behind Vietnam's 37.7 per cent, Thailand's 38.6 per cent and Malaysia's 43 per cent. The top three investment destinations are China, India and Indonesia.

Mr Wood noted: "However, it's important to stress that Singapore will continue to attract lots of foreign direct investment ... but Singapore is moving up the value chain, and attracting higher value activities like R&D, sophisticated manufacturing and financial services."