The mood among businesses improved in February, while consumer sentiment dropped, according to the latest Economic Pulse survey from Bank of Ireland.
Over half of companies expect business activity to increase in the coming months.
However, the findings reveal that consumers are less optimistic about their finances.
For February, the index came in at 88.1, up 3.6 on January and 19.5 higher than a year ago.
This index combines the results of the Consumer and Business Pulses.
The data suggests that the increased cost of living was the main reason for the drop in consumer sentiment.
Geopolitical tensions were also at play - but the fieldwork for the February research was carried out before the Russian - Ukraine conflict escalated.
"It’s encouraging to see the Economic Pulse up for a second consecutive month in 2022 and also back above its pre-pandemic reading," said Dr Loretta O'Sullivan, Group Chief Economist for Bank of Ireland.
If we break down the figures, the Business Pulse stood at 92.4 in February 2022, up 5.3 on January's reading and 23.4 on a year ago.
The Industry, Services and Construction Pulses gained ground in February, while the Retail Pulse was little changed after jumping in January.
With Covid-19 restrictions more or less fully removed, firms in all four sectors were more upbeat about near-term prospects for business activity - although elevated costs remain a concern.
Meanwhile, the Consumer Pulse stood at 71.2 in February, down 2.9 on the previous month, but 4 higher than a year ago.
Concerns around the cost of living prompted households to downgrade their assessment of the economy and their own financial situation.
Annual consumer price inflation is currently running around the 5% mark.
The Bank of Ireland Regional Pulses bring together the views of households and firms around the country.
The results for February show that sentiment was down slightly in Dublin but up in the rest of Leinster, Munster and Connacht/Ulster.
The data reveals that the Housing Pulse strengthened in February, posting its highest reading since the series began in 2016.
The Housing Pulse came in at 122.9, up 8.7 on January's figure and 29.6 higher than a year ago.
84% of households said they expect house prices will rise in the next 12 months.