Here's proof that the upswing in Singapore's electronics cluster is coming to an end

Sales were down by 3.7%.

According to DBS, the build-up in the inventory and stocks of finished goods indexes hint of moderation ahead. The new orders sub-index has eased. This is also reflected by the recent dips in the manufacturing PMIs of key markets such as the US, Eurozone and China.

In addition, the upswing in the electronics cluster is coming to an end. Sales were down by 3.7% YoY and on the absolute dollar basis, it also marks the fourth consecutive months of decline.Electronics PMI has also eased by 0.8pt to 51.2 in the month.

Here's more:

February non-oil domestic export (NODX) growth was stronger than what market had predicted but more or less in line with our forecast. The headline number recorded a 9.1% YoY (Consensus: 7.1%, DBSf: 10.0%) on account of a strong showing in export sales of pharmaceutical and petrochemical products.

Sequentially, NODX rose by a solid 7.2% MoM sa, up from a Chinese New Year related dip of 5.0%. Indeed, a low base coupled with the need to deliver fresh orders to plants in China after the Chinese New Year lull are the key factors that prompted the upside surprise. NODX growth to China registered a stunning 35.5% YoY surge in the month.

Moreover, this has been reinforced by the still healthy showing in the manufacturing PMI. Overall manufacturing PMI inched up a tad to 50.9, up from 50.5 in the previous month, on account of the continued rise in the production index.

New orders, production and inventory sub-indexes have all moderated, suggesting an adjustment in production output level in the making. Manufacturers are attempting to unwind on their production level after having ramped up output over the last 6-9 month.

Indeed, the SEMI book-to-bill ratio has moderated while the global semiconductor sales growth has tapered. The global electronics cycle may have peaked and the impetus going forward may become weaker.

In short, while we do not believe the manufacturing sector will dip into contraction, some degree of downward adjustment in production growth can be expected in the coming months.