AUSTRALIA has crept up one notch on the IMD World Competitiveness Yearbook to number 17 out of 61 countries, following five years of going backwards. 
The Yearbook compares and ranks nations on 342 criteria related to business competitiveness using data from national and regional organisations such as the World Bank, OECD and UN.
It found Australia's political leaders were suffering "policy short-terminism" amid challenges such as the budget deficit and political uncertainty.
Committee for Economic Development of Australia chief executive Professor Stephen Martin said Australia had jumped from 27th to 12th on "economic resilience", which indicated the business community was more confident in Australia's ability to adapt.
"The mining boom is over but the slack is being picked up by other sectors so, while our economy is not going as fast as in the previous decade, we are still growing," he said.
Australia's worst ranking was 54, for international trade, in decline since 2012 due to the terms of trade falling with the end of the mining boom.
NSW Business Chamber chief executive Stephen Cartwright said it was not acceptable for Australia to be 17th.China ranked first and Switzerland second, displacing the US, which ranked third this year after being No.1 for the last three years.