Chief financial officers’ outlook on the current economy declined in the fourth quarter of 2023, according to the CFO Signals report released today by Deloitte. The report found that 47% of CFOs rated the current economy in North America as good or very good, down from 57% in the third quarter.

In addition, 34% of CFOs believe North American economic conditions will improve in the next 12 months, down from 46% in a similar survey in the previous quarter.

“At the cusp of 2024, CFOs expressed a far more conservative outlook than in the previous quarter’s CFO Signals survey, likely due to the continued impact of high interest rates, inflation and tensions caused by geopolitical conflict,” Steve Gallucci, national managing partner, US CFO program at Deloitte LLP, and global leader at Deloitte Touche Tohmatsu, said in a press statement. “However, their concerns are contrasted by signals that the new year will bring greater M&A activity, as well as investments in digital technologies both for strategic and operational purposes, indicating there may be a light at the end of the tunnel.”

The report also found decreased optimism for their companies’ financial prospects among CFOs. While those expressing optimism fell to 38% from 41% in the prior quarter, those expressing pessimism rose to 27% from 19% in the third quarter. In addition, CFOs lowered their year-over-year growth expectations from the third quarter levels across five of six operating metrics.

The CFO Signals survey for the fourth quarter of 2023 was conducted between Nov. 6 and Nov. 22, 2023, among 124 CFOs across the US, Canada and Mexico. The vast majority are from companies with more than $1 billion in annual revenue.