According to the latest figures from INSEE (France's national statistics institute), published on 30 September 2026, La Réunion's unemployment rate reached 19% of the active population in the second quarter of 2026, up 3 percentage points year-on-year. By comparison, mainland France stands at 8.3% — less than half that rate.
A labour market under strain
The island counted 293,900 salaried employees at the end of June 2026, down 0.2% over the quarter. Beneath the headline figure, the picture is mixed: the decline was driven mainly by a fall in public sector employment, which shed around 1,000 positions in three months (-0.9%). Business services (-0.6%) and construction (-0.4%) also contracted.
Conversely, some sectors held up well. Information and communications grew 4.3%, adding around 200 jobs. Retail trade (+0.6%) and accommodation and catering, buoyed by hotel occupancy rising 6% year-on-year, proved more resilient.
Businesses under pressure
The island's business fabric also flashed warning signs. New business registrations fell 5% in Q2 (3,960 created), while corporate insolvencies surged +18% year-on-year — 1,240 proceedings opened between July 2025 and June 2026 — versus +5% nationally. The services and retail sectors were particularly hard hit.
Some encouraging signals
INSEE notes, however, that Réunion's economy is performing better than the national average on several metrics. Paid working hours rose 0.4% year-on-year, while they fell 0.7% in mainland France. Inflation also remained more subdued: +1.5% year-on-year in June 2026, versus +1.8% nationally.
This paradox — high unemployment yet relatively resilient activity indicators — reflects the island's specific labour market structure, characterised by a heavy public-sector footprint and a steadily growing working-age population.
Why it matters
A 19% unemployment rate places La Réunion among the most affected French regions, far ahead of the national average. Rising corporate insolvencies and declining public sector employment signal growing vulnerability in the local jobs market, against a backdrop of national fiscal austerity. Decision-makers and investors should watch Q3 data closely, especially in the public sector and construction.
Source: INSEE Conjoncture Réunion — report dated 30 September 2026