More Signs of Recovery as Factory Orders Rise Again : Economy: In another encouraging sign, the percentage of homeowners behind on mortgage payments dropped.

WASHINGTON — Orders to U.S. factories rose for the third time in four months, and the percentage of homeowners behind on their mortgages fell, said two reports Wednesday that signaled a slowly emerging economic recovery.

The Commerce Department reported that factory orders rose 0.4% in January, reversing course from the steepest plunge in more than a year.

The gain was the third in four months and, said one economist, fresh evidence of “some early signs of life in the manufacturing sector.”

The economist, Gilbert Benz of the Swiss Bank Corp. in New York, said other recent signs have been January’s increase in retail sales and February’s survey of purchasing managers, which showed factory orders continuing to grow.

Federal Reserve Chairman Alan Greenspan has also said orders continued to grow in early February.

Factory orders are a barometer of manufacturing industry plans. Continued growth could mean more jobs in a sector representing about 20% of the nation’s economy.

“But the recovery hangs on prospects for consumer spending,” Benz added. “If that doesn’t materialize, we can’t expect much consumption and growth.”

Benz said that, despite higher retail sales in January, factory orders for consumer staples, housewares and apparel fell that month. Consumer spending, which represents two-thirds of the nation’s economic activity, edged up 0.2%.

Overall, new orders for both durable and non-durable goods totaled a seasonally adjusted $235.0 billion, up from $234.1 billion in December, the Commerce Department said.

December’s 3.7% drop was trimmed from the 3.8% decline first estimated but was still the largest decrease since orders fell 6.2% in November, 1990. Factory orders had peaked at $254.0 billion in October, 1990.

Orders for durable goods, items expected to last more than three years, jumped a revised 2.2%, even more than the 1.5% increase estimated last week.

Such orders totaled $120.3 billion, up from $117.8 billion a month earlier. A 5.0% decline in durable goods orders had pulled the overall total down in December.

Orders for industrial machinery and equipment accounted for the largest increase, a 6.9% gain that wiped out a 3.2% loss a month earlier, the report said.

But orders for non-durable goods, ranging from tobacco to textiles, fell 1.4% after a 2.3% decline in December. They totaled $114.7 billion, down from $116.3 billion.

The back-to-back declines were the first since non-durable goods orders fell for five months ending in March, 1991.

In the mortgage delinquency report, the Mortgage Bankers Assn. reported Wednesday that the percentage of Americans behind on their mortgages dropped in the October-December quarter as lower interest rates reduced many homeowners’ monthly payments.

The proportion of homeowners at least 30 days late on their payments fell to a seasonally adjusted 4.78%, the lowest in a year, the trade group said.

That was down from 5.07% at the end of the third quarter and a five-year high of 5.28% in June. The fourth-quarter rate was still slightly higher than the rate a year earlier, 4.71%

Angelo Mozilo, the president of the association, said the recent improvement is at least partly the result of lower interest rates, which have reduced payments on adjustable-rate mortgages and created a refinancing boom that has enabled many fixed-rate borrowers to cut their payments as well.

“As lenders, we are as happy as the homeowners to see this kind of improving picture,” he said.

He noted, however, that the percentage of homes in foreclosure edged up to 1.04% from 0.98% three months earlier and the highest since 1987. That resulted from the bulge in delinquencies in mid-1990.

Factory Orders Climb Total new orders in billions of dollars, seasonally adjusted Jan., ‘92: 235.0 Dec., ‘91: 234.1 Jan., ‘91: 234.5 Source: Commerce Department