Evidence of the collapse was revealed this week in statistics, compiled exclusively for Accountancy Age, that showed the total value of deals worked on by the large accountancy firms in the first six months of the year has tumbled by more than 60%.
And with the news of job cuts looming throughout the industry, the outlook is grim – commentators do not see an upturn until the beginning of next year.
According to league tables produced by BvD Zephyr, the top nine accountancy firms worked on £5.9bn of deals in the first six months of the year. This compared with more than £14.8bn for the same period in 2001.
KPMG’s head of European mergers and acquisitions, Graeme Griffiths, said: ‘2002 has been very tough for everybody and we are now back at levels last seen in 1997.’
Griffiths said the second quarter of the year had been better than the first, but activity in June had slowed down – he anticipated a quiet summer but believed there would not be a pick-up until the end of the year.
This was a view confirmed by Grant Thornton’s Ian Smart who did not believe there would be an upturn until the final quarter of the year at the earliest, or even 2003. ‘It will be a long slog,’ he said.
KPMG topped the league, working on 44 deals with a total value of £2bn. Last year, the firm was second to Andersen, now part of Deloitte & Touche, with a deal value of £3.6bn for the first six months of last year.
Andersen’s fall from grace saw its deal value plummet from £4.5bn last year to a dismal £247m in the first half of 2002. PricewaterhouseCoopers came second this year, recording £1.5bn of deals – only half the value of deals it worked on last year.
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