Closing the circular economy gap in construction: Strategic barriers and enablers in the Swedish context

The construction sector is one of the most resource-intensive industries globally, yet the transition toward a circular economy (CE) remains slow and fragmented, particularly among small and medium-sized enterprises (SMEs). This study addresses a research gap by focusing on Sweden’s SME-dominated construction sector, an underexplored context in CE research. Using Porter’s Five Forces as a novel strategic lens, we identify how external market barriers and enabling technologies shape the pace and scale of circular adoption. A qualitative research design was employed, comprising semi-structured interviews during 2024-2025, with 40 industry professionals selected through purposive and snowball sampling. Thematic analysis, validated through triangulation and member checking, revealed seven critical challenges, including fragmented regulation, high certification costs, low market demand for circular solutions, and insufficient technological infrastructure. These barriers were mapped onto Porter’s Five Forces framework, illustrating how competitive and institutional pressures constrain CE progress, especially for SMEs. However, the study also identifies high-potential enablers, such as digital solutions. Grounded in real-world stakeholder perspectives, our findings introduce new insights into how competitive and institutional pressures constrain CE progress and how digital innovations (e.g., material passports, AI-based procurement) can help close the implementation gap. By integrating these insights into a strategic framework, we offer targeted policy and innovation pathways to accelerate CE adoption in the built environment. It underscores the need for aligned regulatory, financial, and technological interventions to support scalable, SME-driven circular transitions in construction, with broader implications for resource sustainability and environmental policy. • The gap between CE ambitions and practice in Swedish construction is explored. • Porter’s Five Forces framework is applied to identify external barriers and enablers. • Seven key challenges identified (e.g., fragmented regulations, low circular demand). • Digital tools (AI-driven procurement, material passports) are highlighted as solutions • Targeted recommendations are provided for SMEs, policymakers and industry actors.