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German unemployment has increased month-on-month in March, indicating economic growth concerns in the Europe's biggest economy.

The Federal Labour Office said the seasonally adjusted number of unemployed people increased by 13,000 to 2.94 million in March. Analysts polled by Bloomberg estimated a decline in the number of unemployed by 2,000.

The adjusted unemployment rate was stable at 6.9 percent, a level it has held since October 2012. The unadjusted jobless total, a closely-watched figure in Germany, remained above the 3 million mark for a third consecutive month.

"The economic conditions of the last few months are having little impact on the German labour market, which remains solid," Labour Office chief Frank-Juergen Weise said.

"Demand for new employees is shrinking, but still at a high level. The higher seasonally-adjusted jobless number is partly due to the cold weather in March."

Adding further worries to Germany's job market, Siemens, Europe's biggest engineering company, is planning as many as 1,400 job cuts at three sites of its energy and infrastructure businesses, according to a Bloomberg report, citing "two people familiar with the matter."

The recession in the eurozone, Germany's largest export market, and uncertainties over the Cyprus bailout are hurting business confidence in the country. Entrepreneurs' sentiment declined from a 10-month high in March and manufacturing output declined unexpectedly.

The negative data was after the country shrank by 0.6 percent in the fourth quarter of 2012.

Nevertheless, Germany's Budesbank expects that the economy will revive and return to growth in the ongoing quarter. The central bank forecasts growth of 0.4 percent in 2013, with exports and factory output helping the German economy gather momentum.

erman companies such as industrial-bearing maker Schaeffler AG and carmaker Daimler earlier said that the demand from markets outside Europe will compensate the lower demand from the 17-nation currency bloc.