The number of construction firms collapsing in the three months to 30 June dropped 4.1 per cent compared to the previous three months, new figures have revealed.
The latest business failures report from business information firm Equifax, shows 1,275 construction firms failed in Q2, 4.1 per cent down on Q1 when 1,330 firms went under.
But the number of failures in the three months to 30 June is 62.8 per cent up on the 783 in Q2 a year ago.
Equifax said the sectors that were hit the earliest and hardest in the recession appear to be starting to turn the corner now.
External affairs director Neil Munroe said: “Whilst the year on year figures are pretty stark this is not surprising – in Q2 last year the downturn had only just really started to hit companies.
“But I believe it is actually more relevant to look at how businesses are faring quarter by quarter this year.
“Undoubtedly the recession is still having an enormous impact on business fortunes with many organisations simply unable to survive against the onslaught of falling sales and restricted access to funding to cover the cash flow gaps.
“Of course the next question has to be whether we are going to see the sustained upturn of a V shaped recession or whether this is just a small pre-summer blip and failures increase again, more typical of W shaped recession.”
Last week the Begbies Traynor Q2 red flag alert statistics revealed the construction industry has seen the biggest decline of all UK industries in companies facing significant problems according to new figures.
There has been a 16 per cent fall in the number of construction firms facing significant problems from 22,966 in Q1 to 19,325.
The number of firms facing critical problems fell 6 per cent to 1,241 from 1,315 in Q1, the second biggest fall of all industries after professional services.