Further job losses in the construction industry would risk creating major problems in the future for the delivery of large-scale infrastructure projects, according to the organisation which represents the sector.
The past three years have seen almost 600 Scottish construction businesses go bust, with 196 Scottish construction firms bankrupted in the 12 months to June 2012 alone, the Scottish Building Federation (SBF) said.
The organisation has welcomed the Scottish Government`s decision to transfer money from its resource spending to its capital budget, a move designed to help boost economic recovery.
In a written submission to Holyrood`s Finance Committee, the SBF said: "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. 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.
"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 continued: "We have strongly welcomed the decision to transfer £200 million 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."
The SBF is one of several organisations appearing before the Finance Committee today as it scrutinises the 2013/14 draft budget.
The budget, announced by Finance Secretary John Swinney last week, contains a "stimulus package" for the construction sector worth £40 million this autumn and in the next financial year.
The sector has been hit harder than others during the economic downturn and has been blamed in part for pulling Scotland back into a recession.
The Government will also increase the number of schools being built from 55 to 67, and do it "sooner", with the help of £80 million.