Growth in the manufacturing sector was "relatively subdued" last month, according to the latest AIB Purchasing Managers Index.
The bank said production and incoming new work increased at weaker rates than in December.
The report pointed to "lacklustre export demand and hesitancy among clients in response to heightened economic uncertainty".
However, AIB said goods producers are optimistic about their growth prospects for the next 12 months.
And the bank said confidence reached its highest since August 2023, which "supported solid rises in input buying and staff hiring during January".
The headline index in January was unchanged since December at 52.2, which AIB said signalled "a moderate overall improvement in manufacturing sector conditions".
It said the reading was above the neutral 50.0 value for the thirteenth successive month.
Readings above 50 indicate overall rises in activity.
The Irish manufacturing PMI remains above the flash January readings for the Eurozone, US and UK at 49.4, 51.9 and 51.6, respectively.
"A faster upturn in manufacturing employment and renewed inventory accumulation were positive influences on the headline PMI in January," according to the index, which it said helped to offset the impact of weaker expansions in output and new business.
AIB said while production volumes increased moderately in January, the rate of expansion eased to its lowest for three months.
"This mostly reflected a further slowdown in new business gains at the start of 2026. Latest data signalled only a marginal rise in total new work, with growth the weakest since August 2025."
The bank said respondents to the survey cited "elevated economic uncertainty, risk aversion among clients and softer demand across export markets" as the main factors weighing on order books.
"New work from abroad has now decreased in five of the past six months. That said, the overall rate of contraction was only marginal amid some reports of an improvement in European demand."
Hiring accelerates to fastest rate since July 2025
AIB Chief Economist David McNamara said the manufacturing PMI has now signalled growth in each month since the beginning of 2025.
He said the expansion in January was due to "sustained gains in output, new orders and employment".
"Output rose modestly in January, slowing from the pace observed in December," he added.
Mr McNamara said the respondents noted that "elevated global uncertainty acted as a sales headwind".
"This was also evident in sluggish growth of new orders and a fall in export orders. Nonetheless, some firms cited better demand in European markets."
Despite the muted demand backdrop, he said hiring accelerated to the fastest rate since July 2025, as "firms' plans for expansion spurred a rise in employment".
Mr McNamara noted that purchasing activity and stock building by firms also picked in January, "pointing to some optimism for the year ahead, despite current uncertainty".
The manufacturing PMI said positivity regarding near-term production requirements also led to a solid upturn in purchasing activity at the start of the year.
It said the latest data indicated the fastest rise in input buying since June 2025.
"Meanwhile, input cost inflation accelerated sharply in January and reached its highest level for three years."
AIB said survey respondents "widely commented on higher raw material prices and efforts by suppliers to pass on rising wage costs".
The report said factory gate charges also increased at the start of 2026, "albeit to a much lesser extent than input costs."
The PMI showed that business activity expectations "rebounded" to the highest for nearly two-and-a-half years in January.
It said just over half of the survey panel anticipate a rise in production volumes during the year ahead, while only 7% forecast a decline.
