Concerns over a possible U.S. economic downturn have risen among CFOs across North America, dampening their outlook for earnings, investment and employment for 2020, according to the latest Deloitte CFO Signals Survey.

Results of the survey, which covered the fourth quarter of 2019, showed that 97% of CFOs believe a slowdown or a recession has started or will take place by the end of 2020. That marked an increase from the first quarter of 2019, when 88% said they were expecting a U.S. downturn.

However, only 3% of CFOs are expecting a true recession, down from 15% in the first quarter of 2019, according to Deloitte.

The impact of U.S. trade policy and higher tariffs on their businesses remain among the top external risks CFOs mentioned in the Deloitte survey. An emerging concern among CFOs was the effect of political turmoil and instability on their companies' operations, as well as the potential impacts of the 2020 U.S. presidential election. Other finance executives mentioned worries about consumer demand, and business spending brought about by increased competition, industry disruptions and pricing movements.

Nearly half of the CFOs surveyed cited external risk factors as the dominant constraint to their companies' performance, compared with 29% of executives who mentioned internal concerns such as the level and quality of talent, strategy execution, innovation, managing costs and achieving growth.

In response to a potential downturn, 82% of CFOs say their company has taken at least one defensive action, including reductions in spending, job cuts and delays or cancellations of investments.

Deloitte said CFO projections for company revenue and earnings performance are still close to multiyear lows, and their expectations for capital spending and hiring remain "notably depressed."

"Compared to early 2019, companies appear to be taking more defensive actions related to downturn expectations — particularly around reducing spending and limiting or reducing headcount," said Sanford Cockrell III, national managing partner of the U.S. CFO program at Deloitte LLP.