Markit's Purchasing Managers' Index (PMI) for manufacturing, which accounts for about a fifth of the economy, rose to 58.3 from 56.8 in February, its highest in 71 months.

That was unchanged from a flash reading and well above the 50 level that separates growth from contraction.

"German manufacturing ended Q1 with impressive growth, with new export orders in particular increasing at the fastest rate in nearly seven years in March," Markit economist Trevor Balchin said. "Moreover, manufacturers remain upbeat regarding the 12-month outlook for production."

The biggest threat to this growth momentum is soaring input prices, Markit said, citing metals and chemicals as sources of cost pressures.

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