Circular economy transition in construction: a system dynamics analysis using causal loop diagrams

Despite growing policy commitment, Circular Economy (CE) implementation in the construction sector remains uneven across lifecycle stages. Existing research has relied on linear barrier–enabler frameworks, offering limited insight into how CE strategies are sustained, or diluted over time. This study develops a novel interview-based system dynamics approach that translates stakeholder mental models into lifecycle-integrated causal loop diagrams (CLDs), enabling CE implementation to be examined as a dynamic, feedback-driven process. The United Arab Emirates is selected as an empirical test bed, where rapid construction expansion and evolving sustainability policies provide a relevant context for investigating CE transitions. Drawing on 35 semi-structured interviews with key stakeholders, stakeholder mental models were elicited and translated into CLDs. The analysis reveals that CE implementation is governed by reinforcing and balancing feedback rather than isolated decision factors. Early-stage regulatory interpretation and design commitment shape downstream feasibility, while delivery pressures during construction and end-of-life stages activate balancing dynamics that dilute circular measures. The findings imply the need for regulatory harmonization across jurisdictions, early embedding of lifecycle CE criteria in design and procurement, and confidence in secondary material markets. By linking stakeholder perceptions to system-level causal structures, the study offers policy-relevant insights for strengthening circular practices.