Source: Thomson Reuters

We keep hearing about how M&A activity is on the rise, but that we aren’t anywhere near the bubble environment of 2007. Well, it seems that the gap is narrowing.

Thomson Reuters has released preliminary Q1 data showing $717 billion in 2011 M&A activity through last Thursday, which is off just 25% from the same period in 2007. And that figure shrinks even further if we add today’s $2.4 billion acquisition of GSI Commerce GSIC by eBay EBAY .

The 2011 total represents a 58% increase over the same period in 2008, inclusive of a 52% increase in private equity-sponsored transactions. About half of the deal volume is for U.S. targets (up 36%) and around one-quarter is for European targets (up more than 100%), while both emerging market and cross-border deals experienced declines.

Energy and financials were the leading sectors, although materials experienced the largest year-over-year growth (see chart). Financials were sparked by the $59 billion restructuring for AIG — a deal whose inclusion here is questionable — while energy got a boost from Duke Energy agreeing to buy Progress Energy for $26 billion. Those are the first and third-largest so far in 2011, sandwiched around AT&T buying T-Mobile for $39 billion.

On the private equity side, the largest deal is Blackstone Group’s BX agreement to acquire the U.S. shopping mall assets of Australia’s CentroProperties for $9.4 billion. It’s followed by Apax Partners buying Smiths Medical for nearly $3.9 billion and Clayton Dubilier & Rice taking Emergency Medical Services private for $2.9 billion.

In a separate report, S&P Leveraged Commentary & Data reports that leverage multiples for large deals have climbed half a turn to 5.2x — lower than the heights of 2007, but besting 2008, 2009 or 2010.