The number of Northern Ireland businesses facing "critical" levels of distress fell by over 10% in the second quarter, according to data from insolvency specialist Begbies Traynor.
The latest Red Flag Alert data report showed a 12% fall in critical distress on last year's report. It contrasts to a 5% year-on-year rise across the UK.
Critical distress includes firms facing minor county court judgments and those showing a marked deterioration in key financial ratios.
After a sharp rise in critical distress in the first quarter, Northern Ireland's construction sector recorded just 11 instances in the second three months of the year.
Other sectors which showed improving fortunes were food and beverage, retail and professional services. However, transport, the printing and packaging sector, manufacturing and restaurants all saw increases.
Some 6,788 companies in Northern Ireland displayed early signs of distress in the second quarter.
It includes firms with minor county court judgements of less than £5,000 filed against them.
Lawrence O'Hara, who leads Begbies Traynor in Northern Ireland, said: "After a dreadful set of data in the first quarter of 2019, there is some welcome news for the province in this set of data, with Northern Ireland coming out as the best-performing region in the UK when compared with the same period in the previous year."