High inflation and rising recession risks are darkening the mood in the manufacturing industry.

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Fifty-nine percent of manufacturing leaders say inflationary pressures are making a recession more likely within the next year, according to a survey released on Wednesday by the National Association of Manufacturers.

Three-quarters of manufacturers say inflationary pressures are worse today than six months ago, with 54% also saying higher prices are making it harder to compete and remain profitable.

The survey was conducted May 17-May 31, prior to the alarming May inflation report that set off severe turbulence in financial markets.

"Through multiple crises, manufacturers have proven remarkably resilient, but there's no mistaking there are darker clouds on the horizon," Jay Timmons, CEO of the manufacturing trade group, said in a statement.

The top business challenge reported by manufacturing CEOs in the survey was increased raw material costs, cited by 90% of respondents. The top sources of inflation were increased raw material prices (97%), freight and transportation costs (84%), wages and salaries (80%), energy costs (56%) and shortage of workers (49%).

"Russia's war on Ukraine has undeniably exacerbated higher energy and food costs," Timmons said, adding that deficit spending from the federal government has contributed to high inflation. Timmons did not mention the Federal Reserve's belated shift away from emergency policies.

NAM urged lawmakers to refrain from imposing new taxes and focus on easing supply pressures, including by passing the Bipartisan Innovation Act championed by the White House. Timmons said 88% of manufacturers in the survey see it as an important piece of legislation.

"Though it won't solve every issue, this will give us many of the tools needed to ramp up domestic manufacturing and strengthen our supply chains," Timmons said. "Congress needs to move swiftly to get it to President Biden's desk."

Stocks fell broadly on Wall Street in afternoon trading Monday as protests spread in China calling for President Xi Jinping to step down amid growing anger over severe COVID-19 restrictions.

The world's second largest economy has been stifled by a "zero COVID" policy which includes lockdowns that continually threaten the global supply chain at a time when recession fears hang over economies worldwide. The recent upheaval in China is the greatest show of public dissent against the ruling Communist Party in decades.

The S&P 500 fell 1.5% as of 2:53 p.m. Eastern, with about 90% of the stocks in the benchmark index in the red. The Dow Jones Industrial Average fell 466 points, or 1.4%, to 33,882 and the Nasdaq fell 1.5%.

Markets in Asia and Europe fell. Bond yields were mostly higher. The yield on the 10-year Treasury rose to 3.71% from 3.69% on Friday.

Technology companies were the biggest weights on the broader market. Apple, which has seen iPhone production hit hard by lockdowns in China, fell 2.8%.

Banks and industrial stocks also helped pull the market lower. JPMorgan fell 1.6% and Boeing slid 3.3%.

Several casino operators gained ground as the Chinese gambling haven of Macao tentatively renewed the their licenses. Las Vegas Sands rose 1.7% and Wynn Resorts gained 4.5%.

The fallout from the collapse of crypto exchange FTX continued. Cryptocurrency lender BlockFi is filing for Chapter 11 bankruptcy protection. Cryptocurrency exchange Coinbase Global fell 4.1% and the price of Bitcoin slipped 2%.

Smaller company stocks also lost ground. The Russell 2000 was down 1.8%.

Wall Street is coming off of a holiday-shortened week that was relatively light on corporate news and economic data. Investors have a busier week ahead as they continue monitoring the hottest inflation in decades and its impact on consumers, business and monetary policy.

Anxiety remains high over the ability of the Federal Reserve to tame inflation by raising interest rates without going too far and causing a recession. The central bank's benchmark rate currently stands at 3.75% to 4%, up from close to zero in March. It has warned it may have to ultimately raise rates to previously unanticipated levels to rein in high prices on everything from food to clothing.

Federal Reserve Chair Jerome Powell will speak at the Brookings Institution about the outlook for the U.S. economy and the labor market on Wednesday.

The Conference Board will release its consumer confidence index for November on Tuesday. That could shed more light on how consumers have been holding up amid high prices and how they plan on spending through the holiday shopping season and into 2023.

The government will release several reports about the labor market this week that could give Wall Street more insight into one of the strongest sectors of the economy. A report about job openings and labor turnover for October will be released on Wednesday, followed by a weekly unemployment claims report on Thursday. The closely-watched monthly report on the job market will be released on Friday.

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Elaine Kurtenbach and Matt Ott contributed to this report.

American employers added just 266,000 jobs last month, a sharp downturn from March. 

It's a sign businesses are struggling to fill open positions even as the country recovers economically from the pandemic. 

Construction companies and manufacturers, particularly automakers, slowed hiring last month due to parts shortages. 

Meanwhile, the hospitality sector, which includes restaurants, hotels and venues, is basically begging for workers. 

Lots of jobs are going unfilled because people have changed fields or left the workforce during the last year of the pandemic. And of course, some unemployed Americans are still afraid to go back to work due to the coronavirus pandemic and stubbornly high infection rates in certain parts of the country.

"Here we are in an empty dining room where normally, for lunch, we would be open and serving, you know, a couple of hundred guests," business owner Mac Hay said, "But this year, because of our staff shortage, both with U.S. workers but also workers from overseas, we've we can't fill the demand."

In response, the U.S. Chamber of Commerce is calling on Washington to immediately stop paying Americans an extra $300 in weekly unemployment benefits. It's saying that boost is incentivizing some Americans to not return to work. 

The group also said the Biden administration's supplemental benefits means about 1 in 4 Americans is making more money unemployed than they earned while they were working.

This story originally reported by Gage Jackson on Newsy.com.