205 building and construction firms went into liquidation during January, compared to 218 in January 2010

During January 2011, 205 building and construction firms became insolvent, a 6% fall compared to January 2010, according to information services firm Experian.

In January, 0.13% of the companies operating in the sector became insolvent, compared to 0.14% last year. While the decrease in company failures is positive, building and construction is among the worst performing sectors.

Overall, 1,266 businesses failed in January 2011, representing 0.07% of the UK’s business community. This is down more than 10% compared with January 2010, when 1,426 firms failed.

Managing director of Experian pH, Max Firth said: “Our analysis shows that business failure rates are falling steadily and the financial strength of the UK’s business community is improving.

“Our data also shows that the post-recession business population is beginning to increase once again, with the net number of firms trading up by one percent when compared with last January.

“Irrespective of the environment, firms need to be vigilant and ensure that they have good insight into the financial risks associated with insolvencies among clients and suppliers.”

The North West had the highest insolvency rate in January with 0.11% of its business population failing, closely followed by the North East at 0.10%.