The global market for initial public offerings (IPOs) has slumped in the first half of 2018 amid rising trade tensions and geopolitical concerns, but the deal pipeline for the rest of the year looks healthy, according to a new report from global consulting firm Ernst & Young Global Ltd. (EY).

EY’s report finds that global IPO activity (in terms of the number of deals) was down by 21% for the first half of 2018. Despite the slowdown in the number of deals, the firm also reports that the total value of deal activity in the first half was up by 5% to US$94.3 billion.

“Global IPO figures for the first half of 2018 dipped by volume compared with the same period in 2017, despite higher valuations on some of the world’s largest markets,” said Martin Steinbach, EY’s global and Europe, Middle East, India and Africa IPO leader.

The EY report points to intensifying geopolitical uncertainty and rising trade disruptions as factors that have helped dent deal activity in the first half; yet, the report suggests strong growth conditions supporting deal activity in the rest of the year.

“The good news is that economic conditions continue to be encouraging, equity valuations are high in many parts of the world and interest rates remain low,” said Steinbach. “As a result, we expect a resurgence in IPO activity during the second half of 2018.”

According to the report, Canada has produced just seven deals raising a combined US$381.7 million so far this year. Deal activity in Canada was down by 36% from the prior year and total proceeds were down by 79%. However, there were another six deals raising US$3.1 million on the Canadian Securities Exchange (CSE) in the first half.

Still, deal volume also is expected to pick up in Canada over the next couple of years, the EY report indicates: “Canada has a strong pipeline of deal activity which could enter the public market in the second half of 2018 and 2019.”

The U.S. has been a bright spot in the global IPO market thus far this year, led by the technology sector.

“The second quarter of 2018 was marked by an influx of technology IPOs entering the U.S. market,” said Jackie Kelley, EY Americas IPO markets leader, in a statement. “From 2013 to 2017, we saw health-care companies dominate the markets in terms of deal count, but since then we’ve seen technology companies gaining slowly. Deal count and proceeds raised are up compared with last year, and post-IPO share price performance is solid, creating momentum heading into the second half of the year.”