3- or withdrawn entirely from the competitive bidding picture. This is not surprising when you realize that the six larger publicly held heavy construction firms reported in 1964 that they had performed $900mm worth of work and lost $lmm in the process. Only one of these firms has earned a profit on its construction activities in each of the last four years. Two have lost money in four out of the five years; two have losses in three of the last six years. In a period of unprecedented prosperity this is not a record of which the industry can be proud. However, there now appears to be a better balance between the capacity to perform work and the work available, and this relationship coupled with the fact that construction companies have absorbed about all the losses they are willing to take, points to the prospect that contractors are going to bid more selectively, price more cautiously, and refuse to tender on contracts proposed by engineers or owners which the contractors consider unfair in their terms. Against the backdrop of these optomistic statements, I cannot help but express a word of caution, for we arc beginning to see increasing evidence of the fact that the boom may be topping out because we are approaching the limitations of our capacity to produce. Money and credit have grown increasingly tight, both here and abroad. Furthermore, in the capital expansion programs that we perform for others as well as for ourselves we are encountering the kind of problems that come when demand begins to outstrip the capacity to produce: