Merger and acquisition activity remained robust in the second quarter with more than $631.4 billion worth of deals announced -- up 35% from the year-ago quarter -- but down significantly from the $769 billion in deals unveiled in the first quarter.

Behind this decline in the pace of deal-making, analysts said, is growing uncertainty among executives at both would-be buyers and sellers about the direction of the domestic and global economies.

Investors, earlier in the year, gave a hearty thumbs-up to most of these unions, with Thomson Reuters reporting that many of the major deals have led to improved valuations of the acquiring company’s shares. Often, it is more common to see the acquirer’s shares lose value as investors worry that a deal may have been overpriced.

The enthusiasm of the first quarter may have fallen off a bit as the market stalled in June and as a result of increased volatility in equities markets around the globe.

David Tesher, an analyst at Standard & Poor's, said, “Continued uncertainty on the sovereign debt front, the political battle over the U.S. debt ceiling, general economic uncertainty and structural unemployment have all contributed to a slowdown.”

Interestingly, private equity deals did not slow down in the second quarter the way deals involving publicly traded companies did.  According to Thomson Reuters, there were 961 private equity M&A deals in the second quarter, worth $70.53 billion, up substantially from 983 deals worth $53 billion in the first quarter of the year.

Jeff Raich, a managing director at investment bank Moelis & Co., says M&A has hit a “rough patch.” 

The question on investors’ minds, and thus also on the managers of companies considering acquisitions, is whether the slowdown in economic growth this year from what was supposed to be an improving pace of recovery, is temporary, or is a longer term problem.

For now, most of the big players in the investment banking industry, including Goldman Sachs, Barclays, Bank of America Merrill Lynch and Morgan Stanley Smith Barney are still expecting 2011 to be a big year for M&A.

For that to happen though, the pace of new deals will have to pick up again in the second half.