Stores and shopping centers will be constructed at a rising rate with the expansion of retail volume; but also as a result of the competitive pressures to bring retail outlets into areas evermore convenient to the shopper. Utilities will continue to step up the pace of construction in order to meet the new residential and industrial requirements for energy and communication. In the public sector, with construction expenditures primarily at the state and local levels, larger expenditures in the building of highways and educational facilities will pace a healthy increase in government spending. For the decade ahead, then, healthy increases in construction expenditures appear to be in store. In terms of constant dollars, annual increases in construction outlays of better than 4% appear likely through 197 5, based upon the underlying factors I have quoted. Against this attractive outlook for the future we must now impose the construction industry as we see it today. The year 1964 was one of continued gain, recording an improvement in expenditures for new construction of 6% over the previous year, which itself showed a 5% increase over 1962. Roughly one-half of these increases were offset by rising building costs, leaving an average annual increase, in terms of physical volume, or constant dollars, of approximately 3%. However, the major gains occurred at the end of 1963 and early in 1964. As 1964 ended, the level of spending for construction was roughly equivalent to that in the -3-