The number of business failures has been creeping up in the new financial year, according to research from information solutions provider Equifax.

The research shows while Q1 2011 saw the number of companies failing drop by 5.9% year-on-year, business failures crept up by 1.5% year-on-year during May and April.

Manufacturing & services performed best in Q1 2011, with failures down 14.8% and 10.9%, respectively, but construction continues to struggle, with failures up slightly by 1.4% in Q1.

Neil Munroe, external affairs director at Equifax, says: “At the end of February we saw a year-on-year decrease of 7.9%, however this levelled out slightly for the quarter as a whole, ending on 5.9%. But this performance overall offers clear encouragement for businesses across the UK.

“It’s clear that we’re not out of the woods yet, with some evidence of businesses struggling in the difficult conditions. Failures increased by 1.5% in April/May and while this is disappointing, given the downward trend over the last few months, it’s important not to over-react.”