Yes, it is permitted to build a succah, even from scratch, during chol hamoed. This halacha is taught in the Code of Jewish Law, Orach Chaim 637:1.
(The Biur Halacha has an interesting discussion of what type of building is permitted but concludes that the halacha is clearly as the Shulchan Aruch states and all necessary building is permitted.)
Shana Tova,