While business continues to hold back on capital outlays and consumer expenditures are expected to tail off over the next several quarters, spending by federal, state and local levels of government are building in strength and will help the economy in sustain its expansion.

That view was expressed today by Albert T. Sommers, chief economist for the Conference Board, at a oneday conference on the 1978 business outlook held by the business research organization.

Sommers said a recession is "unnecessary and improbable at any point in 1978 or 1979," and projected a real increase in U.S. economic growth of about 4 per cent wext year, with a somewhat quicker advance in 1979.

While the forecast is not gloomy, Sommers said, "It falls hort of the sustained vigor required to approach the output and unemployment goals of the Carter administration."

He also said that the Carter Administration is unlikely to achieve the balanced budget in fiscal 1981 that the President has set as a top priority.

And Sommers said that the accumulated federal deficits for the five calender years 1975-79 "would amount to a spectacular $285 billion, give or take a dozen billion."

"Such an outcome may well test the emotional stability of the fiscal orthodox," he told the audience of business leaders.

But he noted that, for the near term, spending by various governmental units is providing a needed shot for the economy.

In fiscal 1977, which ends on Friday, federal outlays rose about 7 per cent, but "they are expected to rise at almost double that rate in fiscal 1978, with notable increases in defense spending, as well as in a host of new or enlarged transfer and subsidization programs," Sommer said.

During last year's exonomic pause, federal purchases of goods and services were stable. By contrast, federal outlays during the current slowdown "have already been rising appreciably, and will evidently continue to do so throughout 1978."