CEF managing director Mark Spence said the body's members had a "strong view" that issues regarding the protocol should be resolved "in tandem with the formation of a Northern Ireland Executive".
The formation of an Executive is needed to make critical decisions on planning, procurement and pipelines of work.
"Construction locally is suffering from crippling business cost increases and skills shortages, compounded by this governance and budget uncertainty, which is damaging to investment confidence in the region," he said.
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"We are clear that Northern Ireland construction requires our newly-elected political representatives to enable a fully-functioning Assembly and Executive immediately and work together on the issues for which they have so recently been elected."
He added: "The lack of a fully-functioning government in Northern Ireland has caused uncertainty about future public-sector construction procurement, planning reform and housebuilding.
"All of this requires a Northern Ireland Executive and it is vital that one is formed immediately. We must avoid a protracted period of local government vacuum, which, in a COVID-recovery environment with global inflation, will seriously hamper Northern Ireland’s economic prospects."
