In Réunion, the unemployment rate reached 18% of the active population in Q1 2026, according to the latest INSEE data. That is two percentage points higher than a year ago — and more than twice the metropolitan French rate. Yet the headline figure masks some positive signals in the private sector.
18%: Twice the National Rate
The ILO unemployment rate stands at 18% in Q1 2026 in Réunion, compared to 8.1% in metropolitan France. Over one year, the rise is +2 points on the island, while the mainland posted only +0.7 points. Réunion nonetheless remains far from its 2018 peak, when unemployment was approaching 24%.
A Two-Speed Labour Market
Total salaried employment reached 294,700 workers at end-March 2026, stable over the quarter but up +0.4% over twelve months — slightly better than metropolitan France (-0.2%). The private sector is holding its own at +0.6% year-on-year. Among sector bright spots: temporary employment (+2.0%), trade (+0.4%) and hospitality (+0.1%).
Conversely, business services fell -1.4% and construction -0.4% — two traditionally key sectors for the island.
Business Creation Slows
In Q1 2026, the island recorded 4,190 business creations, down 11% from the previous quarter. Business failures held at 1,150 over the period — part of a worrying upward trend since end-2024. This entrepreneurial slowdown partly reflects tighter financing conditions and cautious household behaviour amid national economic uncertainty.
Why It Matters
An 18% unemployment rate means that nearly one in five economically active Réunionnais is jobless. Beyond the social indicator, this is a central economic question: Réunion cannot fully benefit from regional investments (undersea cable, digitalisation, tourism) without resolving its structural gap between job creation and active population growth. The coming months will be crucial: the construction sector, currently in retreat, is expected to be a key driver of recovery by end-2026.
Source: INSEE Conjoncture Réunion, Q1 2026 — published July 2026