There is enormous potential for the construction industry in adopting a circular economy (CE) approach, but the decision-making tools to support its adoption are lacking. This research aims to identify the factors impacting CE adoption and understand their dynamics, intending to develop decision-making tools to facilitate CE adoption in construction. A mixed-method approach is adopted comprising a literature review, a pre-interview questionnaire, and semi-structured interviews with twenty European experts in the field. A total of 64 factors impacting CE adoption were identified and placed into three interconnected categories: organisational, political and procedural, and technical factors. Also, the connections between the stakeholders' backgrounds and the 64 factors were explored and illustrated by a Sankey diagram. Lastly, a deeper analysis was performed, exploring the relationships between the 64 factors and five entities, including stakeholders, asset lifecycle, material circularity, regulations, and facilitating technologies. As a result, this research further clarifies the impacts of the CE approach on five entities and organises the factors and their dynamics in an entity-relationship diagram (ERD), being the main contribution to the theoretical foundations. By expatiating how CE can be possibly achieved in the construction industry, the ERD is a stepping stone and can inform operable guidance to boost the adoption of CE in the construction industry.