The latest Business Distress Index from insolvency trade body R3 has revealed that levels of business distress in the UK are at a record low, with only a quarter (24%) of businesses reporting a key indicator of distress.

Every indicator of distress tracked by R3 is apparently at its lowest since the research began. The figures show that 10% of businesses are experiencing decreased profits, 11% are experiencing falling sales volumes, 6% are seeing market share fall, 8% are regularly using their maximum overdraft, and 6% are making redundancies.

“Having stayed constant throughout 2014, UK business distress levels have fallen once more,” commented Phillip Sykes, President of R3. “Many companies will feel they have successfully negotiated the trickier parts of the rapid economic growth we saw last year. As growth slows, businesses are less at risk of over-extending themselves.”

“The flip side of this is that signs of growth may start to become rarer as business growth hits a plateau,” he added.

The news is particularly positive for smaller businesses, which apparently are recording the greatest drop in signs of distress. Only 20% of sole traders are reporting one or more signs of distress, compared to 50% in November 2014.

Business confidence is strong, says R3, with just 4% of businesses expecting their activity to decrease in the next year. Around 47% expect it to increase and 48% think it will stay the same.