The Bank of Ireland Economic Pulse fell to 89.9 in November 2018, down from 92.6 in October, as Brexit developments dominated the news flow in recent weeks.
Bank of Ireland noted that while festive cheer helped to lift the mood, consumer and business sentiment was at a low ebb this month and the index posted its lowest reading of 2018 to date.
The Economic Pulse combines the Consumer and Business Pulses.
After last month's sharp drop, the Consumer Pulse was broadly unchanged in November 2018 at 90.1.
Bank of Ireland noted that while Brexit uncertainty was a worry again this month, the countdown to promotional events like Black Friday and Christmas shopping was also on households' minds.
One in five indicated that they intend to spend more on presents this year compared to last year (with younger age groups leading the charge), while just over half are planning on spending about the same.
"Retailers in the border area are less upbeat than elsewhere though, with just 12% expecting a better festive trading period versus 35% in Dublin and 39% in Munster," commented Bank of Ireland's group chief economist Loretta O'Sullivan.
"This owes much to the weak pound which will likely lead to a flurry of cross border shopping trips and is an issue for exporters to the UK as well as it impacts their competitiveness," the economist added.
Meanwhile, the Business Pulse was down 3.2 on last month to stand at 89.8.
Bank of Ireland noted that as the Brexit negotiations entered the endgame, the Industry and Services Pulses posted softer readings this month while the Construction Pulse was little changed.
"While Prime Minister May and the EU did manage to reach a draft Brexit deal in November, it has met with opposition from the DUP, Tory Remain and Leave MPs and Labour.
"This highlights the difficulty there will be in getting it through the UK Parliament, meaning Irish consumer and business sentiment is likely to be buffeted by Brexit developments again in December and possibly into the New Year,' Dr O'Sullivan said.
And the Housing Pulse recovered some ground in November 2018, coming in at 105.1, up 3.6 on last month's reading but still 12.3 lower than a year ago.
The lender said that rising supply and the ongoing adjustment to the Central Bank's mortgage rules have contributed to some softening in house price inflation and a cooling in expectations over the past while.
However, with employment and incomes increasing and house completions still running below what is needed, seven in ten households expect prices to rise in the next 12 months, up from two thirds in October, it added.