Innovation is seen as one of the major factors to improve construction industry. However, new technologies and processes are difficult for construction companies to adopt due to the conventional structure of the industry. Therefore, it needs to be regulated and promoted by the decision makers of whom prevailed of the benefits of innovation practices. This study aims to develop a structural equation model illustrating the impact of innovation on construction industry with a case study. The study results approved that there is a significant relationship between the innovation practices of construction companies and construction industry innovation.