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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鈥檚 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: 鈥淥ur analysis shows that business failure rates are falling steadily and the financial strength of the UK鈥檚 business community is improving.

鈥淥ur 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.

鈥淚rrespective 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.鈥�

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%.