The United States will remain an attractive investment destination for Singapore companies, even as the world’s largest economy prepares for life under Republican president-elect Donald Trump’s administration.
This was the view of Yeoh Mei Ling, International Enterprise (IE) Singapore’s regional director for the US, who cited the country’s strong market fundamentals and Mr Trump’s pro-business and pro-growth stance as reasons for this optimism.
IE Singapore is the government agency that spearheads the overseas growth of Singapore-based companies and promotes international trade.
Ms Yeoh, who is based in New York, has served in her current posting for about two years, following a stint in London as the agency’s centre director for Europe.
In the last couple of weeks since Mr Trump’s shock election triumph on Nov 8, she has been meeting representatives of Singapore companies with operations in the US to suss out the sentiments on the ground.
She told The Business Times in an interview on Monday: “We don’t expect any significant impact on Singapore firms in the long run, and there are still many opportunities for investment and expansion in the US.”
She said the US economy has been on a steady growth path, driven by strong consumer spending and a stable job market.
Real growth in gross domestic product (GDP) increased at an annual rate of 1.4 per cent in the second quarter of this year, up from 0.8 per cent in the first quarter.
The US Bureau of Economic Activity has pegged the unemployment rate at around 5 per cent.
Ms Yeoh said many Singapore companies have adopted a wait-and-see attitude for now, as Mr Trump gets ready to take office, and stressed that they intend to continue with their business plans in the US and have no intention of pulling back.
IE Singapore is facilitating about 30 Singapore projects there, a 50 per cent increase from three years ago.
Ms Yeoh described this as a “fairly healthy” number for a developed market that is traditionally not at the top of the list for Singapore companies when they venture abroad.
“Business interests lie primarily in the consumer and technology sectors, and this is aligned to our strategy for the US market,” she said.
Pointing to the recent Black Friday event – the traditional shopping spree in the US organised in conjunction with the long Thanksgiving weekend – she said it was proof that US consumer spending remained healthy.
A survey by the National Retail Federation found that more than 154 million people made purchases during the four-day retail extravaganza that began last Thursday, up from 151 million last year.
However, shoppers spent slightly less this year: US$289.19 on average per person, down from US$299.60 last year.
“Overall, consumer spending sentiments are still fairly strong. Moving forward, there will be some scrutiny as people wonder what Mr Trump will do to boost the US economy and support jobs, and this will also affect consumer sentiments in the months to come,” she said.
As for the technology sector, her sense is that the US election outcome will neither hurt the industry’s competitiveness nor leading American technology firms in the short to medium term, given the sector’s resilience and adaptable nature.
On the issue of trade, Ms Yeoh said that it is too early to predict how the Trump administration’s trade policies will pan out; however, she urged Singapore exporters to keep a close watch on the discussions.
“In the short term, we do not foresee any immediate impact, given that re-negotiations of trade policies and implementation take time.
“Today, supply chains, especially those of large US corporates, in some sectors are tightly integrated globally. Any change to this supply chain or relocation will require time,” she said.
It is also timely for Singapore companies to review their supply chains and consider manufacturing investments in the US in the coming years.
Being closer to their American customers would enable them to respond more quickly to their needs and better meet local content requirements.
Despite all the uncertainty surrounding the future of the US with Mr Trump at the helm, Ms Yeoh said there are many reasons for investors to stay upbeat.
“Throughout his campaign, Mr Trump has proposed various pro-business, pro-growth policies.
“Since getting elected, he has continued to emphasise these policies, including increased infrastructure spending, overhaul of the tax code, as well as lighter regulation on businesses.
“These will lead to the US economy’s continued GDP growth in the short to mid-term, and contribute to its business competitiveness in the long run,” she said.
“We don’t expect any significant impact on Singapore firms in the long run, and there are still many opportunities for investment and expansion in the US.” Ms Yeoh
This article was first published on November 29, 2016.
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