THE ECONOMY : Two Leading Barometers Climb in Feb. : Forecast: Gains in key indicators and factory orders continue to point to a sustained recovery, analysts say.

The government provided fresh evidence Wednesday that the third year of a slow but sustainable recovery is underway, as it reported February gains in two key economic barometers.

The Commerce Department said its index of leading economic indicators rose 0.5%, the fifth advance in six months. At the same time, it said orders to U.S. factories increased 1.4% to a new record.

The index is designed to forecast the overall economy six to nine months in advance. Factory orders are a key gauge of future manufacturing activity.

“In a sense, all systems are go” for continued but modest growth, said economist David Jones of Aubrey G. Lanston & Co., a New York securities dealer.

“The recovery is now past the two-year mark and there seems to be little risk of a fallback into recession,” concurred Lynn Reaser, an economist with First Interstate Bancorp in Los Angeles.

The economy has grown slowly after the end of the recession in March, 1991. But while most analysts believe that it continues to expand, they project growth of 3% this year, half that of previous recoveries.

In fact, only six of the 11 forward-looking statistics in the leading indicators index were positive in February. Four pointed down and another was virtually neutral.

Although the performance was better than during January, when the index was unchanged, it was far less than a 1.7% surge in December.

“It’s consistent with our contention that the growth rate in late 1992 was unsustainably rapid,” said Stephen S. Roach, an economist with Morgan Stanley & Co. in New York. “The combination of the two reports say the recovery is still intact, but the rate of advance is likely to slow.”

Among the indicators contributing to the index was a growing backlog of unfilled orders, meaning current production facilities and manpower were unable to keep up with demand and suggesting the possibility of new hiring.

Other positive contributors were an increase in orders for new plants and equipment, fewer new claims for unemployment insurance, rising prices for raw materials that suggested growing demand, rising stock prices and a longer average workweek.

Index of Leading Indicators Seasonally adjusted Index, 1982=100 Feb. ‘93: 153.6 Jan., ‘93: 152.8 Feb., ‘92: 147.3 Source: Commerce Department

Factory Orders Total new orders in billions of dollars, seasonally adjusted Feb. ‘93: 258.6 Jan., ‘93: 255.0 Feb., ‘92: 233.3 Source: Commerce Department