Bank of Ireland's Economic Pulse has fallen to its lowest level so far this year, dropping more than 9% when compared to October.
The index, which combines surveys of consumers and businesses, came in at 85.8 for November - down 8.6 points month-on-month.
The survey found that business sentiment softened in the month, with expectations around short-term business activity now weaker than before. The Business Pulse stood at 85.2 in November, down 9.7 on last month and at a 2016 low.
But 40% of firms still expect to increase spending next year, with a further 50% anticipating that they will spend the same as in 2016.
Bank of Ireland noted that sentiment was softer across the board, with the outcome of the US election adding to the air of uncertainty post the Brexit vote and contributing to a general paring back of expectations for business activity over the next three months.
All four sectors fell this month, with retail particularly hard hit and construction also down from last month's high.
"External headwinds were to the fore this month, dampening business sentiment and weighing on investment plans. But with customer demand and other factors providing support, two in five expect to increase their investment spend in 2017,' according to Bank of Ireland's group chief economist Dr Loretta O'Sullivan.
On the consumer side, sentiment was also weaker with households less optimistic about the health of the economy and their own financial prospects.
The Consumer Pulse fell for a second month in a row in November, coming in at 88.3, down 4.6 on last month’s reading and also a new low for 2016.
Bank of Ireland said that with the external backdrop unsettled and some industrial unrest at home, households downgraded their assessment of the economy and their own financial prospects this month, and also scaled back expectations for further falls in unemployment.
"The weakness of sterling is a headwind for this sector with some consumers set to travel to the North to shop. The festive season is fast approaching and one in five expects to spend more on presents this year compared to last, though some Christmas shopping is likely to be done over the Border," Dr O'Sullivan stated.
However, the Housing Pulse survey bucked the broader trend this month, rising to 108.1 and a 2016 high.
The share of respondents expecting price gains in excess of 5% over the next 12 months increased in November, with a notable improvement in Connacht and Ulster.
But Bank of Ireland noted that a shortage of labour is emerging as a growing issue in the construction sector though, with 37% of builders finding it difficult to get workers.
"The mismatch between demand and supply is continuing to put pressure on house prices and rents," the bank's economist said.