Around 669,000 jobs in the sector and related industries have been lost since the onset of the global financial crisis in 2008, according to the report.
The number of jobs lost is equal to the “entire population of Palermo,” the report said.
Meanwhile, over 11,000 construction businesses have gone bust since 2008.
“We’ve hit the bottom...the crisis has been the longest-running and most intense in the history of the country,” the report said.
ANCE forecasts the sector will dip a further 5.6 percent in 2013.
The association also said house sales have halved since 2008 and have “returned to the levels of the mid-1980s, with a drop of 26 percent in 2012 alone.”