usiness environment of industries of consists of various structure and system, which determines situation and condition of all industrial problems which industries are transacted. Those system and structure influence all industrial practice including construction industry, directly or indirectly. This research aims to identify a problem in construction industry in Indonesia. These research model have been adobted from aniekwuk's research in Nigeria.

These research includes 44 contractors which operate in many cities in java island. From these analysis about contractor perception about the business environment of the construction industry, had occurred 3 main problem in the business environment of the construction industry in Indonesia, in consecutively : a) Owners unwillingness to compensate fully for price escalation suffered for reasons beyond your control ; b) Problems of awarding most of the government contract to foreign firms; c) Difficulties in securing credit on reasonable terms from commercial banks for interim construction financing.

From all the problem in the business environment of the construction industry in Indonesia, the result in Spearman correlation describe that contractor's perception of the industry classification in order : 1) contracting and contract administration practice, has described the significant correlation ; 2) business environment of the construction industry, has described the significant correlation; 3) capacity and efficiency of the contractor, hasn't described the significant correlation ; 4) capable institution to cater for the progress of the construction industry, hasn't described the significant correlation.