The six-week hosepipe ban will remain in place until July 21st despite rainfall across the country.
Irish Water says of 900 water schemes, 37 are still in drought and 59 are at risk of drought.
Speaking on The Pat Kenny Show, Irish Water's managing director Niall Gleeson explained that there's been "enormous demand" on the water system as more people work at home.
He said two-weeks of 'pretty good' rainfall followed three months of dry weather.
He explained: "It has stopped things getting worse, but we are nowhere near recovering the water resources we had.
"The other thing is the rain has been quite patchy - Dublin has got quite a lot, but other areas of the country haven't got that much rain and they're taking much longer to recover."
In terms of demand on the system, he pointed to the Dublin area - nothing that the amount of water used by household increased by 20%, but there hasn't been a comparable drop in business use.
Mr Gleeson also said there was extra stress on the system during the warm weather around the June bank holiday weekend.
He said: "Hospitals, big pharmaceutical plants, a lot of the manufacturing plants, food processing... all big consumers of water, and they stayed going.
"We did see some reduction in non-domestic demand, but not enough to compensate for the big increase in domestic demand.
"Next week we'll have hairdressers and pubs returning - they'd be quite heavy consumers of water. If the domestic demand stays high, and those new businesses start to come back and use water... we may have issues."
Mr Gleeson said Ireland should not be a 'water-stressed' country.
However, he said it takes time and a 'large amount of money' to improve the infrastructure and systems.
He said in Dublin there's 'zero' headroom when it comes to the water supply - with some days seeing more water consumed than we produce.