Dana Cimilluca of Deal Journal (WSJ.com) pointed to data from Thomson showing that M&A deals as a percent of GDP currently account for about 4%, compared to 7% in 1999 at the peak of the dot-com bubble. Also, there’s a 67% correlation between economic activity and M&A since 1990 — the economy is slowing but still growing at around (a respectable) 3%. Source: WSJ.com, “M&A in Trouble? Not Necessarily”

One thing to keep an eye on is the rising risk premium, which is making deals more difficult to finance. If anything, we won’t see as large of deals, but overall M&A activity should remain robust. Keep in mind a slower economy may compel larger firms to use M&A as a tool for growth/expansion, although it may not create shareholder value for the acquiring party.