Executives are anticipating an uptick in both merger and acquisition and strategic alliance activity over the next two years, according to Deloitte’s third annual Corporate Development survey. Nearly half the respondents (46%) expect an increase in mergers and acquisitions activity.

According to Deloitte, apparently executives in the manufacturing sector are the most bullish on M&A prospects with more than half responding they expect an increase in strategic alliance transactions driven by investment in emerging markets and a need for more judicious deployment of scarce capital.

The survey also indicates that corporate boards are playing a more significant role in the M&A process. More than 40% of executives believe their boards of directors have become more involved in M&A over the last two years, with boards asking for more frequent, detailed updates and spending more time deliberating these transactions.

While 40% of respondents ranked mergers as the most difficult type of deal to execute, nearly one in four (23%) viewed joint ventures and strategic alliances as presenting a greater challenge. Also, more than 40% of executives concede that their companies are less skilled at executing strategic alliances than mergers. As to why strategic alliances stall or break down, executives most frequently pointed to the alliance partners’ differing views and their inability to align strategy.

“Strategic alliances and joint ventures can be difficult transactions, nevertheless we are seeing a notable uptick in this area,” says Chris Ruggeri, principal, Deloitte Financial Advisory Services and its Merger & Acquisition Services leader. According to Ruggeri, “The perception of strategic alliances is changing from a last resort to a preferred investment strategy, especially in emerging markets, and companies are learning from industries like technology and life sciences that use strategic alliances very effectively to manage risk and capital.”

For complete survey results, click here.