Home Construction in West Down 11.9% : Housing: Nationwide, pace dropped 2.7% in July amid political, economic fears. But figures are still better than a year ago.

The pace of new home construction dropped 11.9% in the West and a modest 2.7% across the nation last month, as California builders fretted about the impact of several base closings in the state and developers nationwide continued to worry about the future of the economy.

Analysts also noted that many builders postponed their construction plans in July as President Clinton’s economic plan wended its way through Congress and that many new projects in the Midwest were delayed by the flooding along the Mississippi River.

“There was just too much economic and political uncertainty last month, and builders don’t like to build when things are uncertain,” said Jay Shackford, a vice president with the National Assn. of Home Builders in Washington.

New homes in the West--where California accounts for about half of all construction activity--were started at a seasonally adjusted annual rate of 273,000 in July. Although that was down 11.9% from June, it was up 1.9% from the 268,000 rate posted in July, 1992.

California builders’ economic concerns were compounded by the pending closure of several military bases, including the sprawling March Air Force Base in Riverside.

“The base closings and cutbacks in the aerospace business are going to keep construction in California flat for the rest of the year,” said Ben Bartolotto, an economist and research director for the Construction Industry Research Board in Burbank.

“A modest rebound should come in 1994, when we’ll finally start to see some of the economic benefits that come with lower interest rates,” he said.

Although July construction nationwide eased 2.7% from June to a 1.21-million rate, last month’s annualized home building pace was 9.6% faster than a year ago.

Flooding in the Midwest pushed starts in the region down 4% last month. Construction in the South rose a modest 2.5% from June and edged 0.8% higher in the Northeast.

Construction in California and the rest of the nation was constrained last month as many builders postponed their projects to see how Clinton’s tax plan would fare in Congress.

Although the package had little in the way of new incentives to spur construction, it was supported by most builders because it would continue existing programs designed to boost construction of apartments for low-income people and homes for first-time buyers.

The plan was narrowly approved by Congress earlier this month.

Passage of the package “won’t reignite the construction business by itself, but it will certainly provide a boost,” said Shackford of the builders trade group in Washington.

Programs that were extended by the plan’s passage account for about 100,000 housing starts a year and 175,000 construction jobs, Shackford said.

Permits for new construction in the West, a barometer of future activity, dipped 2.5% in July from June but rose 2.3% from a year earlier. Across the nation, permits climbed 3% from June and were up 6.1% from a year ago.