The unemployment rate in Réunion reached 19.6% in the first quarter of 2026, an increase of 2.6 percentage points year-on-year, according to recently published INSEE data. The island is now the second most affected French region, behind French Guiana (+2.7 points). A key paradox: salaried employment remains stable.
A Statistical Paradox Explained
Réunion had 294,700 employees at 31 March 2026, stable compared to Q4 2025 and up +0.4% over twelve months — outperforming the national average (-0.2%). How can unemployment rise while employment holds steady? A wave of new jobseekers entering the labour market, partly driven by the full employment law applied in early 2025, mechanically inflates the rate without an underlying deterioration in employment itself.
Rising Sectors, Struggling Sectors
Employment in non-market services grew by +0.6% this quarter and +1.1% over twelve months. Hospitality and catering posted +2.3% annually. Conversely, construction lost 100 jobs (-0.4%) and business services fell -1.4% (-300 jobs). Temporary employment grew +2.0% this quarter, signalling some market flexibility.
Business Creation Dips
4,190 businesses were created in Q1 2026, down 11% from the previous quarter. This seasonal dip is worth monitoring as Réunion seeks to diversify its growth drivers beyond the public sector.
Why It Matters
With a 19.6% unemployment rate and an overall employment rate for 15-64 year-olds of just 52% (versus 69% in mainland France), Réunion continues to face a structurally fragile labour market. The challenge for local decision-makers: translate stable salaried employment into real inclusion, targeting high-potential sectors — tourism, digital, blue economy — capable of creating sustainable jobs.
Source: INSEE Conjoncture Réunion no. 42, Q1 2026 data.