1. Capital operating times increased in 2018, despite a slight slowdown
The Banque de France’s productive capital operating times (COT) survey provides data on the adjustments made by companies to respond rapidly to changes in demand without resorting to new investments. Indeed, faced with an unexpected rise or fall in demand, companies first adjust via their capacity utilization rate (CUR) and capital operating times, then adapt their labour and capital stock – see notably the study by Cette, Lecat and Jiddou (2016), which is based on this survey data.
Capital operating times increased in line with industrial activity
Between 2017 and 2018, COT increased by 1.9% on average – a slower pace than that observed between 2016 and 2017 (up 3.7%). This development is in line with a slowdown in growth: according to Insee, GDP rose by 1.5% in 2018, following a rise of 2.3% in 2017.
Changes in COT are closely linked to changes in industrial activity. Manufacturing output was less dynamic in 2018 than in 2017. This change in productive activity, and therefore in COT, was also accompanied by a very slight fall in the CUR over the period (see Chart 1 and Table 1).
While COT rose in the same proportions as in 2017 among small and medium‑sized enterprises, they registered a sharp slowdown among large enterprises, growing by only 0.6% in 2018, compared with an increase of 4.2% in 2017. Changes in COT also differed substantially from one sector to another over these two years. While COT increased in the food, beverages and tobacco products sector (from –0.5% to +0.5%) and in the electrical, electronic and computer equipment and machinery sector (from 4.4% to 5.0%), they posted a sharp fall in the transport equipment sector (from 8.0% to 0.6%) and, to a lesser extent, in the other industrial products sector (from 3.3% to 1.7%) – see Table 1 and Charts 2a and 2b.
Companies expect COT to increase further in 2019, by 4.0%, a projection shared on average by SMEs and large enterprises. At the sectoral level, the food, beverages and tobacco products sector foresees the largest increase in COT (6.0%), followed closely by the electrical, electronic, computer equipment and machinery sector (5.7%) – see Table 1 and Charts 2a and 2b.
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