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The relevance of nowcasting in times of inflation

Major economies across the world are now fighting high levels of inflation. Rising energy costs, the war in Ukraine, and the huge quantitative easing programmes introduced in response to the coronavirus pandemic, are all contributing to significantly increased inflationary pressures around the world. There’s now a widespread acceptance that, in the words of the Federal Reserve, tackling inflation is “highly likely to involve some pain.”

Inflation is putting the financial dynamics of many companies in flux

Large parts of this pain will be shouldered by small and medium-sized enterprises (SMEs). Rising prices will put margins under pressure. Higher interest rates, implemented by central banks to try and manage inflation, will make it harder to obtain bank loans for refinancing – or, at the very least, make it more expensive. Meanwhile, the state support introduced to assist SMEs throughout the pandemic is now drying up or is due to be repaid. All of this is putting the financial dynamics of many companies in flux and exacerbating their ability to access cash and financing.

Risk insights are crucial in times of inflation

In this context, it’s more important than ever that companies know if their suppliers are at risk of going under or facing stress. Firms need to know if their invoices are going to be paid, or if suppliers will continue to provide them with essential goods or services. In other words: businesses need real-time information to assess supply chain risks on an ongoing basis. Therefore, businesses around the world need to focus on creative approaches to acquiring and utilizing real-time data. 

Nowcasting: A Better Alternative 

Owlin’s advanced Natural Language Processing (NLP) pipeline works to monitor news signals in real-time and pick up on potential risk. The pipeline is able to analyze over 600,000 articles a day, in sixteen languages, and aggregate data insights from these articles into simple numerical scores that reflect the level of risk. This is powered by a custom-built analytics engine, which turns news signals into single risk scores and indicators.

Owlin’s technology therefore helps companies with “nowcasting” techniques – obtaining economic indicators that reflect present realities. In the context of rising inflation and potential supply chain difficulties, Owlin’s NLP pipeline picks up on news signals that suggest concerns are being raised about a given company. Particularly in environments where companies’ finances are in flux, and the situation is changing constantly, nowcasting helps firms determine what’s happening in real-time. 

What can we do for you?

Utilizing NLP technology to obtain real-time insights into what’s happening in your supply chain is an innovative – and effective – way to manage your risk in these difficult times. Find out what Owlin can do for you by contacting us or scheduling a demo. We are excited to get to know you. 

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