THE number of Scots firms going bust has fallen to pre-recession levels, according to the latest report by auditors.

New figures from accountancy giant KPMG show improving fortunes for Scottish enterprises as more ventures succeed and business confidence grows.

However, the reduction is expected to plateau and Blair Nimmo, head of restructuring for KPMG in Scotland, warns the full impact of the steel industry’s collapse is yet to be felt.

Unveiling the figures, he said: “There are now fewer businesses failing than before the recession, and there is no doubt that, for the most part, business confidence is on the rise.”

According to the report, the change has not affected small, medium-sized and large organisations equally.

The number of corporate insolvency appointments for July to September was 177, down 30 per cent from the same period in 2014, when the total was 254.

The latest results also mark a fall of 17 per cent on the previous quarter to June 2015.

Liquidations, mainly used for smaller firms, fell by 34 per cent year-on-year, going from 239 to 158.

However, administrations, which typically affect larger organisations, rose by 27 per cent year-on-year, from 15 to 19.

The period includes the failure of Glasgow’s McClure Naismith, one of the country’s oldest legal firms, which entered administration in August.

Fletcher Shipping, of Portlethen in Aberdeenshire, also collapsed after the price of leasing offshore platform supply vessels fell by around 80 per cent. Family-run construction firm Stuart McNee, based in Dunoon, also ceased trading, with the loss of 60 jobs.

Nimmo said: “The latest figures reveal a material fall in the number of companies going into insolvency in Scotland over the past quarter compared with the three months prior and the same period the year before. We can see similar six- and nine-month comparative trends.

“That being said, we’re reaching a natural levelling-off period which will likely prevail, irrespective of economic conditions, meaning we will continue to see similar numbers of businesses going into liquidation and administration.

“The effects of the recession are still fresh on the minds of most corporates, which is reflected by cautious optimism.

“Instead of a flood of deals, businesses are focusing on less risky transactional activities.

“From a sector perspective, the low oil price looks like it might be around for a while yet, but it is pleasing to note that most corporates are addressing this through active cost and working capital control, and this is certainly where we are concentrating our efforts with clients.

“We have also recently seen significant problems in the steel sector, albeit it is a little early to forecast the likely outcome and impact across Scotland.”