Global merger and acquisition activity fell to its lowest level in five years, according to financial activity monitor Dealogic, as the financial world continues to reel from the aftermath of the economic crisis of the past two years.

Further M&A activity for the world's eight largest economies -- commonly known as the G-8 -- is down to its lowest activity since Dealogic began keeping track. 

Year to date in 2009, M&As  fell 39% to $702.6 billion in transaction volume. For the United States, the largest participant in M&A, deal volume is down to an estimated $375 billion compared to $680 billion from a year ago.

The biggest advisor in 2009 was the investment firm Goldman Sachs (GS), who led the advising business with $339.8 billion in volume this year, followed by Morgan Stanley (MS) with $322.7 billion and JPMorgan Chase & Co. (JPM) with $299.2 billion.

All three saw an increase in business, with several of their competitors -- Lehman Brothers, Bear Stearns and Merrill Lynch -- gone or merged with other firms.

Of the industries where M&A activity appeared, the largest industry for volume was the financial industry itself -- primarily fueled by the equity raises done by the major firms to prepare for repayment of Troubled Asset Relief Program money -- which saw volumes of $183.2 billion. 

Health care was the second largest industry with M&A volumes, primarily led by notable deals of Merck’s (MRK) purchase of Schering-Plough (SGP) and Pfizer’s (PFE) purchase of Wyeth (WYE).

More broadly, several of the world's developing economic regions saw M&A volumes drop sharply

Latin America saw M&A deals fall by more than 50% to $33.7 billion, the Middle East saw deals fall by 23% to $3.2 billion. Asia ex-Japan saw deal volumes fall by 13%, with both India and China dropping by 33% and 27% respectively.