The A458 between Golfa, Welshpool and Llanfair Caereinion closed this week until the middle of April for work to replace a collapsed culvert running underneath the road, with a 15-mile diversion in place.
Powys councillor Graham Breeze says businesses along the road are already been hit by loss of customers and is calling for financial help for them.
He is also worried there could be more serious accidents along both the official diversion route and nearby lanes already being used as short cuts.
The route is often used by day-trippers and holidaymakers from Shropshire and the West Midlands on their way to the coast and there are worries that the roadworks will run into the busy Easter holiday getaway.
Councillor Breeze has written to local Welsh Assembly members asking for support for residents.
"The A458 between Welshpool and Llanfair Caereinion will be fully closed in both directions near Golfa Hall until mid-April, according to a schedule of works published by Traffic Wales," he said.
"Traffic will be diverted at the A458 Raven Roundabout, Welshpool, onto the A490 north for approximately six miles to the junction with the A495 then south west along the A495 for approximately eight miles before re-joining the A458 at Llanfair Caereinion.
"These diversions are via minor roads which, in many cases, were not built to accommodate the volumes of traffic now being seen and in some cases are being ignored by motorists using even more minor roads to take short cuts. There have already been numerous collisions on these minor roads in the three days of closure.
"Urgent measures need to be taken to improve the diversion process and to speed up the three-month project with the possibility of introducing 24-hour working."
He said he was also calling for financial help for businesses affected by the road closure.
"One pub/restaurant has reported a devastating loss of trade in the first two days of the closure with diversion signs placed outside the entrance to the premises. Businesses are already trying to recover from the terribly damaging pandemic situation."
A spokesperson for the Welsh government said: "Whilst the Welsh Government sympathises with any disruption suffered as a result of the works, there is no statutory basis for offering compensation for any economic loss incurred as a result of a highway authority carrying out works under its statutory power or duty."