Mergers and acquisitions (M&A) activity among commercial provincial brokers is failing to pick up ahead of forthcoming regulations, according to research by Cornell Consulting.

Since 1 January 2002 only seven brokers had left the top 250 commercial provincial brokers list, said Cornell.

This compares with ten in the whole of 2001. In 2000, 60 commercial provincial brokers were either bought, merged or went bust.

Brokers' turnover has increased by 10% in the first six months of 2002 and those in the construction sector have recorded far higher growth, according to the research.

Tony Cornell said: "Profit levels for provincial brokers are probably at the highest levels ever and the prices being offered do not reflect the current high level of returns.

"The most sensible strategy for most is to grow organically at the moment," he added.

Cornell predicted that the M&A market would pick up dramatically as 2004 approached.