The research, by Plimsoll Analysis, suggests that the UK contractors will consolidate and losses will follow in the coming year.
Senior Analyst David Pattison said, "The 196 companies we have identified as in danger need to act now if they are to survive.
"It very important they review their entire business cost base and take action now to significantly reduce their outgoings. Whilst job losses are undoubtedly bad news for any company, such decisive action may be called for to guarantee the ultimate survival of the business- even if this means the business is 30 or 50% smaller than it was."
1500 leading civil engineering contractors were quizzed about their plans to deal with the coming economic downturn.
The research suggests that up to 12996 jobs could go as companies seek to get costs in line with sales.
More than 10% of companies surveyed are already running at a loss, and three quarters confirmed the need to reduce staff numbers.
Plimsoll say that companies need £154,000 in sales per employee to remain competitive.
Of the 1500 firms individually assessed, 196 companies are losing money and heavily in debt. These firms need to merge or sack up to 30% of staff to remain afloat.
The news reflects further bad news from the wider economy, the British Chamber of Commerse suggesting that up to 300,000 job losses were expected in the coming year.