It's that time of the year again – the Australian Football League Grand Final is set to begin tomorrow at 2:30 pm. The pies will soon be in the oven, and the drinks put on ice as the excitement builds.
For the fourth year in a row, it will be a Victorian team – Hawthorn – taking on an interstate team – The West Coast Eagles. If victorious, Hawthorn will enter the history books as the fifth club in the 117-year history of the AFL to win three consecutive grand finals.
Will the result of the premiership tomorrow be similar to the current state of the economy – the East Vs the West?
Western Australia is a natural resource rich state and home of industry titans such as Woodside Petroleum Limited (ASX: WPL) and Fortescue Metals Group (ASX: FMG). It's also an important source of revenue for global giants including BHP Billiton Limited (ASX: BHP) and Rio Tinto Limited (ASX: RIO).
The resources industry has been hammered by falling commodity prices over the past few years, and all of these companies are trading at 5-year lows. Could they be the underdogs who will be having the last laugh in 12 months' time?
The eastern states, often complaining of a "two-speed economy" during the mining boom, have well and truly made up for it in the past few years as their strengths including finance, medical research and numerous service industries surge ahead.
Companies such as banking heavyweight Macquarie Group Ltd (ASX: MQG), global biopharmaceutical giant CSL Limited (ASX: CSL), and Corporate Travel Management Ltd (ASX: CTD) have all delivered market-thumping returns to shareholders.
These eastern-based companies have strong competitive advantages and operate in growing industries that should provide tailwinds into the future. The western-based resources businesses have to accept the (currently very low) market price for their products and the outlook is gloomy.
For these reasons, the eastern economy looks set to continue powering ahead of the west in the year ahead, and I'm tipping Hawthorn will win the flag tomorrow!
