BUSINESS failures in Yorkshire rose slightly last year, latest figures reveal.
But the number of firms in the region entering insolvency fell significantly during the final three months of 2006.
Government figures showed that 1,117 firms in Yorkshire became insolvent last year, as against 1,093 in 2005.
However, insolvencies fell by 6.9% during the fourth quarter of 2006 compared with the third quarter and by 9.5% compared with the final quarter of 2005.
Corporate insolvencies across England and Wales rose by nearly 4% last year to 16,969. Retailers were worst hit, with a 10% rise.
Steve Ellis, a partner with accountancy firm PricewaterhouseCoopers, said the figures were "a clear warning sign" for the economy.
He added: "There are a number of well-publicised factors affecting `UK Ltd', such as rising interest rates and spiralling costs.
"However, in our experience most of the companies that have gone into insolvency have done so owing to difficulties in dealing with competitive pressures," said Mr Ellis.
"Our own research shows that the retail and construction sectors have been particularly hard hit."