(Reuters) - Factory activity in New York State plummeted this month by the most in nearly two years, a survey showed on Monday, with new orders falling sharply and input prices climbing at the fastest rate in more than two years in the latest sign the economy may be weakening.

The Federal Reserve Bank of New York said its Empire State manufacturing index plunged by nearly 26 points - the largest drop since May 2023 - to a reading of negative 20.0 from positive 5.7 in February.

The reading was lower than all 26 forecasts in a Reuters poll of economists, which had a median expectation of minus 1.50.

"New orders and shipments declined," the report said. "Input prices increased at the fastest pace in more than two years, and selling price increases also continued to pick up. Optimism about the outlook waned considerably for a second consecutive month."

It was the latest survey to paint a picture of a weakening factory sector struggling to adjust to President Donald Trump's roll-out of tariffs on a rapidly widening range of imported goods. Trump on Monday repeated his threat that more tariffs are coming in early April, and he reiterated that he had no intention of granting exemptions for the hefty levies on steel and aluminum imports that went into effect last week.