Around 43 per cent of adults and 42 per cent of young people polled in 2018 thought that relations between the two communities are better now than they were five years ago, according to the Good Relations Indicator report.
These were significant decreases on the corresponding 2017 figures of 49 per cent and 46 per cent.
President of the inter-denominational Irish Council of Churches Brian Anderson told Premier he thinks Brexit and politics in general has caused divisions and hostility which ultimately feeds a more general intolerance.
He said: "The kind of language people are using and that kind of drumming up of rabble (between Protestants and Catholics) just causes for a sense of folks thinking, 'we need to draw back here' and causes us to ask where is our certainty, where is our identity and who is leading us in these areas?
"I can speak for the community I live and work in and I would imagine something similar would be going on within the Catholic community so I think that would reflect in the scores that have come out from the Northern Ireland Office."
Ahead of Remembrance Sunday Anderson says he hopes services across the country will be: "Remembering those who died in the two world wars and conflicts across the world thereafter.
"I hope we will be preaching a gospel of peace, reconciliation and solidarity and that we are seeking to be salt and light and people of peace making in Northern Ireland."
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