Key Drivers for Recent Retail Closures and Business Restructurings, and Relocations to Neighbouring Countries
Ministry of Trade and IndustrySpeakers
Summary
This question concerns an inquiry by Ms Hazlina Abdul Halim regarding the drivers of recent retail closures and business relocations, trends across the manufacturing and retail sectors, and measures to safeguard local jobs and maintain business competitiveness. Minister Dr Tan See Leng explained that restructuring is driven by cost, technology, and supply chain considerations, with companies often shifting production regionally while retaining headquarters functions in Singapore. He highlighted that Singapore’s economy grew by 6.1% in the first half of 2026, with manufacturing and retail both expanding and registering more business formations than cessations. In 2025, the Economic Development Board secured $8.9 billion in total business expenditure commitments and $14.2 billion in fixed asset investment commitments. To sustain competitiveness, the Government is supporting businesses and workers to pivot into growth areas such as advanced manufacturing, AI, high-value trust-based services, quantum, and space.
Transcript
77 Ms Hazlina Abdul Halim asked the Minister for Trade and Industry (Energy and Industry) in light of recent retail closures, restructuring and relocations of business from Singapore to neighbouring countries (a) what has the Ministry assessed to be the key drivers; (b) whether similar trends are emerging across manufacturing and retail sectors; and (c) what measures are being considered to strengthen Singapore's attractiveness as a business and manufacturing hub while safeguarding local jobs.
Dr Tan See Leng: Businesses regularly review and optimise their operations in response to changing market conditions. Drivers for businesses' relocation or restructuring include cost, technology and supply chain considerations. For example, a company may shift its production to regional countries for cost optimisation while retaining its headquarters here to benefit from Singapore's ecosystem for functions, such as product development, regulatory and quality oversight, distribution and supply chain planning. The Government closely monitors the economic conditions to ensure that we remain an attractive hub for businesses and sustain the supply of good jobs for our people.
In the first half of 2026, the economy expanded by 6.1% on a year-on-year basis, following full-year growth of 5.3% in 2024 and 5.0% in 2025. In particular, the manufacturing sector grew by 7.3% year-on-year in the first quarter of 2026, and 12.5% in the second quarter of 2026. Although the retail trade sector did not grow as fast as manufacturing, it recorded year-on-year growth of 2.5% in the first quarter of 2026 and 1.0% in the second quarter of 2026. In both sectors, the number of new business registrations exceeded the number of business cessations over the first half of the year.
On balance, Singapore's value proposition to businesses remains strong. In 2025, the Economic Development Board secured $8.9 billion in total business expenditure commitments, with the majority coming from investments in headquarters, professional services and research and development, and $14.2 billion in fixed asset investment commitments, including about $12.1 billion from manufacturing-related projects. These investment commitments were on par with recent years.
We do not take the competitiveness of our economy and our attractiveness to investors for granted. In line with the Economic Strategy Review recommendations, the Government will continue to strengthen Singapore's position as a leading business hub by supporting businesses and workers to pivot, grow and seize opportunities in growth areas, such as advanced manufacturing, AI, high-value trust-based services as well as pursue emerging technologies, such as quantum and space.