Whatever message Chancellor Gordon Brown may have been trying to impart about Britain's economic well-being this week, he will not have welcomed the findings of a global survey which says that Britain has become a markedly less favourable location for business in the past year.

According to the World Economic Forum's 26th annual Global Competitiveness Survey, Britain has fallen by two places from its 2004 ranking, to 13th, but it remains better placed than rivals France or Germany to do business with Asian tiger economies, such as China.

The annual survey is topped, for the third consecutive year, by Finland, despite its authors' concerns about the Nordic nation's high taxation system. With the United States in second place in the WEF survey, Finland is one of five Nordic countries in the top ten. Australia, ranked tenth, is the biggest "climber" economy among the top-ranked nations in the past year, up four places. Other notable placings include South Korea, up 12 places to 17th, while China and India's emerging economies are ranked 49th and 50th of the 117 nations surveyed.

Britain's ranking makes it the best place to do business among G7 economies in the EU, according to the survey's authors.

"The business community in Britain is considerably more upbeat about the near-term growth outlook, reflecting the presence of more efficient markets, better able to intermediate resources and deliver economic growth," Augusto Lopez-Claros, the chief economist and director of the WEF's Global Competitiveness Programme, said.

"This is especially the case for its labour market and the financial sector, which are world-class. While the government has run budget deficits in recent years, these have tended to be smaller than in France and Germany, against the background of much lower levels of public debt.

"The UK is well positioned to rise to the challenges of increased international competition from India and China."

Among the British business leaders surveyed, the biggest cause for concern - named by 15 per cent of respondents - was the inadequately educated workforce. This was seen as a worry for more businesses than tax regulations or government bureaucracy. Crime and inflation were concerns for only 3 per cent of respondents in Britain.

The WEF rankings are drawn from a combination of hard data, publicly available for each of the economies studied, and the results of the Executive Opinion Survey, a comprehensive evaluation conducted by the WEF, together with its network of partner institutes. This year nearly 11,000 business leaders were polled in 117 economies worldwide.

In explaining the apparent success of Finland, Sweden (third), Denmark (fourth), Iceland (seventh) and Norway (ninth) in its rankings, Senor Lopez-Claros said: "The Nordic countries share a number of characteristics that make them extremely competitive, such as very healthy macroeconomic environments and public institutions that are highly transparent and efficient, with general agreement within society on the spending priorities to be met in the government budget.

"While the business communities in the Nordic countries point to high tax rates as a potential problem area, there is no evidence that these are adversely affecting the ability of these countries to compete effectively in world markets, or to provide to their respective populations some of the highest standards of living in the world.

"Indeed, the high levels of government tax revenue have delivered world-class educational establishments, an extensive safety net, and a highly motivated and skilled labour force."

The entire report, published by Palgrave Macmillan, can be ordered online here.