Consumer confidence is rising but businesses are becoming increasingly uncertain, according to the latest Economic Pulse from Bank of Ireland.
The Bank of Ireland Economic Pulse came in at 91.8 in June. The index, which combines the results of the consumer and business Pulses, was down 0.6 points on May's reading and 9.7 on this time last year.
Loretta O'Sullivan, Bank of Ireland's group chief economist, said that households were more positive about the economy and their own financial situation.
But the uncertainty generated by political shifts including the Conservative party losing its majority in the UK parliament weighed on business sentiment, the economist added.
Today's survey reveals that confidence amongst consumers is showing the greatest signs of recovery, with the index rising in June to reach its highest point in the past 11 months to stand at 96.4, up 2.3 on last month.
"There is a widely held belief that warmer weather acts as a mood boost. Judging by the results of the latest Consumer Pulse, this looks to be holding up with households more upbeat this month," Ms O'Sullivan said.
However businesses are now less confident than they were in May and the Business Pulse stood at 90.7 in June 2017, down 1.4 on May and 12 on this time last year.
Ms O'Sullivan noted that the weaker pound is a headwind for Irish firms selling into the UK market and the Pulse data show some softening in export orders in June.
On the housing market, while respondents were slightly more reserved than they had been before, the majority still anticipated price rises in the coming 12 months.
The Housing Pulse eased back for a second month in a row to 114.2, though it is still at an elevated level and 8.3 higher than this time a year ago.
Bank of Ireland said that the on-going mismatch between supply and demand is impacting the rental market as well, with the cost of renting a key concern for two in five households.