The Global Business Travel Association (GBTA), the business travel and corporate meetings organization, unveiled its second GBTA BTI Outlook-Western Europe report, a semi-annual analysis of the five most critical business travel markets in Europe, including Germany, the U.K., France, Italy and Spain. GBTA said these five markets together represent the largest share of business travel in Europe, nearly 70 percent, and provide a barometer for the health of the entire European business travel market.

The report, sponsored by Visa Inc., includes the GBTA-BTI, an index of business travel spending that distills market performance over a period of time. According to the survey, Germany, France and the U.K. are expected to see positive GDP growth in 2012, though under the 1 percent level. Interdependencies in trade, banking, and distribution have affected the region, so 2012 GDP growth expectation for the Euro area (17 countries) has been downgraded following the spring 2012 report to negative 0.4 percent. Italy and Spain are currently in recession and expected to remain so until 2014.

Overall business travel spend among major European markets is expected to fall 2.2 percent in 2012 to $177 billion before bouncing back by 1.4 percent in 2013. On the other hand, German business travel spend is expected to rise 1.6 percent to hit $50.8 billion in 2012, before growing 3.3 percent in 2013. U.K. business travel spend is expected to remain flat in 2012 ($40.2 billion) before growing 2.8 percent in 2013. France business travel spend will fall 2.2 percent to $17.9 billion in 2012, before growing 1.1 percent in 2013. Spain business travel spend will decline 7.8 percent in 2012 to $17.9 billion before falling another 1.6 percent in 2013. Italian business travel spend will fall 6.9% in 2012 to $32.9 billion and will shed another -1.2 percent in 2013

"Europe has unfolded pretty much as we expected in our inaugural spring 2012 report,” said Paul Tilstone, managing director of GBTA Europe. “However, as a result of weaker first half prospects in Spain, Italy, France and the U.K, our 2012 GDP growth expectation for the entire Euro area has been downgraded slightly in the fall report to -0.4 percent from -0.3 percent…with lingering debt challenges and continued austerity measures, the European economy will likely continue to be challenged for years to come. The GBTA's fall report therefore remains cautious, with overall business travel spend forecast to increase by 1.4 percent in Western Europe in 2013."

European unemployment is arguably one of the region’s key social and economic concerns. Only Germany has succeeded in bringing down unemployment since the Great Recession, but even its progress has slowed through 2011 and 2012. Spain's unemployment rate has risen to nearly 25 percent, Greece is at 22 percent and Portugal at 15 percent. Despite modest GDP growth expectations, even France and the United Kingdom are not expected to make progress on unemployment until 2014 or beyond.

The GBTA report highlights a strong correlation between job growth and travel spend, with correlation analysis over the entire historical period suggesting that domestic business travel spend tends to lead job gains by about one quarter. This correlation holds, to varying degrees, among all five European countries profiled.

The report also found that export growth provided a welcome surprise in second quarter 2012 for Germany and Spain. Germany's trade position is more globally diversified with larger export proportions going to the world's most dynamic emerging markets, which is not the case for most other Euro area countries whose trade is more dependent on intraregional relationships. The GBTA analysis of international outbound travel found that one of the strongest correlations across European countries is with exports.

GBTA forecasts German business travel spending will grow by 1.6 percent in 2012 to $50.8 billion and 3.3 percent in 2013 to $52.5 billion. Domestic business travel spending will grow an estimated 2.8 percent in 2012. International outbound spending in Germany will decline 3 percent in 2012. Business travel spending in Germany has been supported by relatively strong industrial and service sectors and is spread across a number of large commercial hubs including Frankfurt, Munich and Berlin.

The United Kingdom has the second highest level of spending on business travel in Western Europe with $40.2 billion in 2011, according to GBTA. The U.K. maintains a large volume of trade on the European continent resulting in a high proportion of spending on international outbound business travel (35 percent in 2011). GBTA forecasts total spending on business travel in the UK to remain flat in 2012. International outbound travel from the UK will fall 3.1 percent and domestic business travel spending will grow 1.6 percent. For 2013, GBTA predicts 2.8 percent growth in business travel, with domestic business travel gaining 2.3 percent and spending on international outbound business travel gaining 3.9 percent.

Business travel spend in France is expected to suffer a loss of 2.2 percent in 2012 with total spending on business travel falling to $35.7 billion. Business travel in France will continue to recover along with the broader European economy in 2013 and will grow an estimated 1.1 percent to $35.1 billion. Any recovery in French business travel spending will be driven by domestic travel, which is expected to be flat in 2012 followed by growth of 4.5 percent in 2013. GBTA forecasts outbound international travel from France to fall 5.7 percent in 2012 and another 4.6 percent in 2013.

Southern Europe will remain in recession until at least late 2013, according to GBTA. It expects business travel spending in Spain will decrease by 7.8 percent in 2012, falling to $17.9 billion. Spending on total domestic business travel in Spain to drop by 5.9 percent in 2012 followed by a drop of 0.4 percent in 2013. International outbound business travel from Spain, which has grown to make up one-fifth of total Spanish business travel, will fall at an even greater rate than domestic, dropping 14.4 percent in 2012 followed by a drop of 6.2 percent in 2013. Outbound international travel will suffer due to a weak domestic economy, slower growth in China and the U.S. and a relatively weaker euro.

For Italy, the situation continues to get worse rather than better, according to GBTA, which expects austerity measures will continue to take their toll on the corporate sector and corporate travel budgets though the rest of 2012. That is expected to result in business travel spend losses of 6.9 percent in 2012, followed by 1.2 percent in 2013. Spending on domestic business travel in Italy will fall 6.5 percent in 2012, followed by another 0.8 percent drop in 2013. Spending on international outbound business travel, which will also suffer from a weaker euro, will fall 10 percent in 2012 and 3.9 percent in 2013.