The Scottish Building Federation (SBF) says the past three years have seen nearly 600 Scottish construction companies close.
SBF has also pointed to the 196 Scottish construction firms that have been bankrupted in the 12 months to June 2012 alone.
The body has disclosed a written submission to Holyrood`s Finance Committee, stating: "The evidence is that many construction firms that struggled to survive the previous recession are now being forced into compulsory liquidation as this second economic downturn begins to take hold.
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"The ongoing reduction in jobs, skills and capacity within the industry risks creating major problems when the industry finally begins to recover, with the potential for a chronic shortage of skills and labour in future years that will drive up costs and could stymie the delivery of major infrastructure projects."
But SBF has also suggested recent action by the Scottish Parliament could alleviate the damage.
"We welcome recent calls by the Scottish Government for additional direct capital investment to boost the construction sector and the wider economy, and will continue to campaign in this direction to enable the recommencement of the numerous 'shovel-ready' projects across Scotland currently stalled due to a lack of affordable finance", it said.
"We have strongly welcomed the decision to transfer £200m from resource spending to support capital spending over the three-year spending review period and the subsequent announcement that an additional £382 million would be allocated to the Scottish Government's capital budget between 2012 and 2015."
SBF is one of several organisations appearing before the Finance Committee today as it scrutinises the 2013/14 draft budget.
(IT)
