The survey results come on the heels of Henry Paulson's first speech as U.S. Treasury Secretary, in which he warned America "must welcome competition, not run away from it" if the country wants to maintain a competitive advantage.

According to the PwC study, only 9 percent of senior executives believe the nation has moved ahead in its economic competitiveness over the past five years, and a near majority, 48 percent, believe we have lost ground. Another 26 percent see a mixed picture -- ahead in some areas, lagging in others; 12 percent say our competitiveness has stayed about the same; and 5 percent did not answer.

Digging deeper -- examining 16 related factors -- nearly two in three business leaders (65 percent) said U.S. industry has lost ground over the last five years in costs for worker healthcare and pensions -- followed by manufacturing efficiency (38 percent) and alternative energy sources (38 percent). On a positive note, 63 percent said industry has moved ahead in business ethics and corporate governance, and 50 percent cited gains in employee productivity:
"Overall, nearly half of these business leaders believe that the nation has lost some of its competitive traction over the past five years," said Greg Garrison, U.S. operations leader of PricewaterhouseCoopers. "Most see worker health and retirement benefits as hobbling U.S. industry -- and ethics, governance and worker productivity as enablers."

Examining the implications of these and other factors, 81 percent of senior executives said their own company or industry has been negatively affected by the cost of worker healthcare and pension costs over the past five years -- including 43 percent citing a major impact, and 38 percent a minor one. Other important negative factors included: increasing government regulation (cited by 63 percent), manufacturing's shift to low-wage countries (51 percent), availability of more low-priced goods from abroad (44 percent), and increased education and skill levels of workers in other countries (42 percent).

Comparatively few saw key structural economic factors as having impacted their company or industry, including: the U.S. budget deficit (cited by only 25 percent), the U.S. trade deficit (24 percent), and increased U.S. indebtedness to Far Eastern countries (24 percent).

"More than eight in 10 say their own company or industry has been negatively impacted by worker health and retirement costs," said Garrison. "But it is also noteworthy that so few see the budget deficit and other economic factors as affecting their company or industry."

Educational and intellectual vulnerabilities

As with the nation's competitiveness, a near majority of executives (46 percent) believe that the country has lost ground over the past five years in educating its people to meet new global business challenges. Only 12 percent say the U.S. has made progress in this regard, while another 18 percent see a mixed picture. Twelve percent note no change, and two percent did not report.

Specifically, 59 percent said the nation has slipped in producing needed mathematicians and scientists, and 42 percent cited software programmers.

"Top executives see the U.S. as slipping competitively when it comes to education and intellectual property," said Garrison. "The urgency for addressing these issues becomes intensified when seen in terms of rising education and skill levels in other countries."

Despite any lost ground in national competitiveness, 84 percent of surveyed executives are optimistic about the long-term ability of U.S. business to grow and increase profits; only 12 percent are pessimistic. In addition, 86 percent are optimistic about their own company's ability to be competitive with its global rivals; only 5 percent are pessimistic.

"Our well-known national optimism is a competitive advantage in itself," said Garrison. "But we also run the risk of being lulled by our optimism. We would do well to focus the nation's upbeat, can-do attitude on addressing recognized limitations in our national competitiveness."