Latest research from accountant PricewaterhouseCoopers revealed that insolvencies among construction firms fell 17% during the first quarter of this year compared to the same period in 2009.

But the bankruptcy toll is still grim with 674 building business going to the wall during the first three months of the year at a rate of 56 a week.

The figures mean construction still has the dubious honour of being the worst hit sector when it comes to insolvencies.

PwC experts believe the failure rate is also easing because contractors are looking at other options rather than just folding firms.

Mike Jervis, partner in the business recovery services practice at PwC said: “We are seeing a fall in the number of administrations as businesses are starting to look at other options before insolvency is used as a last resort.

“Financial restructuring, company voluntary arrangements and schemes of arrangement are now being used as businesses are now starting to realise that the sooner problems are identified, the quicker a solution can be found.”

The figures show that across all industries 4,251 companies became insolvent in the first three months of 2010 – a 4% decrease on the previous quarter and a 20% drop on the same quarter of 2009.