Consumer confidence, however, is up slightly at the start of 2017...
Two in five Irish workers are expecting an increase in pay this year, according to Bank of Ireland's latest Economic Pulse survey.
This closely mirrors the sentiment among businesses, with 37% of firms planning to increase basic pay over the next 12 months.
Consumer confidence climbed for a second consecutive month, hitting 94.4 in January. Bank of Ireland cited the unemployment rate falling to an eight-year low, the IDA securing a record number of FDI investments last year, and tax receipts beating targets as reasons for households greeting the new year with a better outlook of both their personal finances and the economy.
The overall Economic Pulse was up 0.7 on December, standing at 93.1. The index, which combines the results of the Consumer and Business Pulses, is 6.9 lower than last January's reading, however.
Ipsos MRBI surveyed 1,000 households and over 2,000 businesses on behalf of the bank.
Bank of Ireland's group chief economist Dr Loretta O’Sullivan said:
"It was a steady start to the new year for the Economic Pulse, with sentiment among firms little changed on the month and households shaking off the January blues."
One in four people reported that they are likely to buy a car. Some 44% of people consider it a good time to buy big ticket items, such as electrical goods and furniture, compared with 35% last month.
Despite this more positive picture, the bank stated that the results were "unlikely to provide much comfort" to businesses due to worries over an upcoming hard Brexit and Trump's protectionist policies in the US.
Business sentiment remained more or less unchanged, at 92.8, following a noticeable increase in December.
Ambition among firms, however, is starting to waver. While two in three companies plan to expand in the next three years, this is down from the three in four planning to do so in January 2016. This slight uncertainty comes in response to the prospect of a hard Brexit and US President Trump's protectionist policies.