Fewer CFOs rated the current economy favorably, and they were less positive about future prospects over the next year, according to the CFO Signals report released today by Deloitte.

A survey of CFOs for the report found that 34% rated the current North American economy favorably, down from 40% in the first quarter.

Looking a year ahead, the survey found 34% of CFOs believe the North American economic conditions would improve, down from 54% in the first quarter.

“External challenges like inflation and high-interest rates and geopolitical uncertainties seem to be impacting CFOs’ assessments of macroeconomic conditions,” said Steve Gallucci, national managing partner, US CFO Program at Deloitte LLP. “We saw optimism tick upward last quarter, but presently, CFOs are expressing more caution and have a weaker appetite for taking greater risks.”

The survey also found 80% of CFOs were worried about talent internally. However, while talent and labor topped the list of concerns for nine consecutive quarters, their main internal concern was execution risks to strategies and transformations at 81%.

The report also found that 54% of the surveyed CFOs reported that their CEOs are asking them to focus on cost reduction, while more than one-third of CFOs said their CEOs want them to focus on strategy and transformation, performance management, revenue growth, investment and capital and financing.

The CFO survey for the second quarter was conducted between May 1 and May 15, and 122 CFOs across the US, Canada and Mexico participated. The majority of respondents came from companies with more than $1 billion in annual revenue.