The unemployment rate has jumped from 5.2% to 5.5%, a figure not seen since June 1999.
The headline figure from the Central Statistics Office showed an increase of 8,507 to 197,992, beating February's record rise of 8,000. This represented a 27% increase on the same month last year, the biggest monthly percentage rise since March 1983.
The seasonally adjusted Live Register figure rose by 12,000 from February to reach 199,900. This was the biggest rise on record.
More worryingly, the increase in March was evenly split between men and women, suggesting wider deterioration in the labour market beyond the construction sector.
This differs from recent months, when men made up most of the rise.
The figures were higher for all regions, with the biggest percentage increase of 7.2% coming in the south-east.
As the jobless figure rises, the Central Bank says that the problems in the global banking sector are proving to be more prolonged and far-ranging than had been hoped.
The bank expects Irish GNP to increase by just 2% this year, down from a rise of 4.5% in 2007.
However, GNP is expected to make a recovery next year and rise by 3.25%.
The figures on GDP show that a rise of 2.5% is anticipated for 2008, compared to 5.3% experienced last year. This is also expected to rebound to 3.25% in 2009.
The slowdown in the housing sector is also starting to impact on the Irish economy, according to the Central Bank.
It says that output peaked at 88,000 units in 2006, but that figure fell to 78,000 units last year. The downward trend is expected to continue into 2009 to just 50,000 units.
However, the bank has welcomed the dip in construction activity and fall in property prices, saying that this will lead to a more sustainable market.