The Federation of Master Builders (FMB) found only 13% of companies reported an improvement in workload, expected workload and inquiries, compared to 27% in the second quarter of the year.
Those responding negatively edged up from 36% to 38% giving Scotland a net balance, the difference between those reporting higher workloads and those reporting lower levels, of -25.
That was the largest deterioration in confidence seen across the UK in the period and the worst level reported in Scotland this year.
Grahame Barn, director of FMB Scotland, said: "These results show the SME construction sector in Scotland remains in deep trouble. We welcome the Scottish Government's plans to support the refurbishment and house-building sectors through its sustainable housing strategy, but more urgent action is required to arrest the decline in the Scottish construction sector in the immediate term."
Northern Ireland, London and the south-east of England all saw net balances plunge in the three months to the end of September. While other areas reported improvements, they remain in negative territory.
Across the UK, the net balance for overall workloads remained negative but improved by six percentage points to -10, which is the best recorded for two years.
While sectors all remained negative, the only one not to show improvement was private housing.
Almost 70% of respondents expect material costs to rise in the six months to March next year but only 20% plan to raise their own prices.
Around four-fifths of firms expect to keep wages and salaries unchanged although only 9% intend to increase staffing levels, down from 14% in the previous quarter.
The FMB represents more than 10,000 firms. The typical respondent to its survey employs up to nine people and has a turnover between £100,000 and £249,999.