Increased continental integration has had a notable effect on the regional patterns of trade, production and investment in North America, according to a new report from Scotia Economics.

“Every Canadian province has witnessed a sizeable increase in exports since NAFTA’s inception, but the most dramatic impact has been on the Prairies – led by Alberta,” says Adrienne Warren, senior economist, Scotia Economics. Export growth from Canada’s three Prairie provinces averaged 13% annually from 1994 to 2001, outpacing the 10-11% average gain in Atlantic and Central Canada and double the 6% yearly rise in British Columbia & the Territories.

During this time, the Prairie provinces’ share of total Canadian exports rose four percentage points to 20%, making it the only region to garner a larger piece of the domestic export market.

According to the report, the Prairie provinces have gained market share in both the U.S. and Mexico. Strong U.S. energy demand and rising prices have fuelled the increase in exports to the U.S., while the agri-food industry accounts for most of the rise in shipments to Mexico.

For the U.S., the strongest export gains – both to Canada and Mexico – have been in the Southern and Western states. Exports from the Southeast, the Southwest and the Far West have increased at a 10-11% annual rate since 1994 compared with an 8% yearly rise in nationwide shipments. “These regions dominate many of the fastest growing (until recently) export sectors – mainly high-tech manufacturing,” adds Warren.

Included in the report is an overview and detailed economic and financial outlook for each of the three NAFTA nations. Canada is expected to lead the North American recovery this year, with real GDP growth averaging almost 3.5%. Growth on the continent should become more balanced next year, with Mexico once again emerging as the region’s top performer.