Although 18% more businesses failed last year, the rate for construction company failures slowed according to the Equifax Business Failures Report.
Figures for 2009 compared to 2008, show an 18% increase in the number of businesses that went bust, but quarter 4 figures suggest the UK economy is in recovery.
The external affairs director of Equifax, said: "The construction sector is definitely starting to turn the corner with a 6.9% decrease. This widespread decrease has to be good news for the economy as a whole."
Every business sector - apart from wholesale - saw a downturn in businesses going bust in quarter 4 last year, compared to 2008.
There were also signs of promise across every region in the country apart from the West Midlands where business failures went up 3%.
The external affairs director of Equifax, said: "Clearly the UK economy is not out of the woods - when comparing 2009 to 2007 overall there is a 39.5% increase in failures. So the businesses that have survived so far must continue to be very careful about how they manage their customer and supplier relationships to ensure they get paid on time and don't' get caught out by bad debt or failure.
"And they also need to make sure they are well prepared for external factors that they can't change - it's unclear yet how the VAT change back to 17.5% is going to affect business. But we think our latest figures should give encouragement to those organisations that have come through the last 12 months relatively unscathed."
Here at Greengates Builders Merchants Accrington, Lancashire we hope the recession is coming to an end and the number of failing businesses decreases even more.