That's according to the latest results from the World Competitiveness Rankings from the Swiss business school IMD.
According to IMD, Austria placed 24th, a fair way behind countries such as Germany (12th), the Netherlands (8th) and Sweden (5th).
The competitiveness report rates countries on several different factors, including economic performance, government efficiency and infrastructure.
Having steadily fallen down the rankings from eleventh place in 2007 to 26th in 2015, this year Austria for the first time in nearly ten years managed to move back up again.
The decline over the past decade is partly due to the country's financial problems following the global recession, including the billions of euros of debt incurred by the state of Carinthia following the collapse of the Hypo Alpe Adria bank.
The country also does not fare well when it comes to government efficiency, where it places 35th out of 61 total countries. This is partly to do with the ranking of Austria's ‘fiscal policy' which places 60th, almost at the very bottom.
Where Austria does impress, according to the report, is in infrastructure, which includes quality of life (where it places 2nd) and health infrastructure (3rd).
In terms of challenges in 2016, an early retirement age, administrative reform, bottlenecks in secondary education, and reducing tax burden are top of the list according to the Federation of Austrian Industry who provided information for the report.