The Chicago Business Barometer™ Survey asked firms in May what their greatest challenges to conducting business at the moment are.

• Increased costs were voted by the largest share as the greatest challenge, followed closely by labor shortages. Declining economic sentiment and delivery/lead times came in equal third. Fifth most challenging was decreased demand and sixth material shortages.
• This question was last posed in May 2022. Last year, increased costs was also flagged as the most pressing issue, whilst material shortages were seen as more acute at the time.
• Labour shortages and weakening economic sentiment were largely seen as less challenging in 2022.
• Easing supply chain pressures and lower commodity prices underscored PPI declining to a Jan 2021 low of +2.3% y/y in April. Yet with CPI hovering around the 5% mark, the May special question highlights that inflation and it's dampening effects on demand remain at the forefront.