The unemployment rate in Réunion reached 18% of the active population in Q1 2026, up 2 percentage points year-on-year, according to INSEE data published on July 2, 2026. The gap with mainland France — where the rate stands at 8.1% — has widened to one of its highest levels in years.
A two-speed labour market
Salaried employment remains stable at 294,700 positions on the island, with annual growth of +0.4% — slightly better than the -0.2% recorded nationally. Yet this stability contrasts with the surge in the broader halo of unemployment: more than 209,000 Réunionnais are registered with France Travail, a sign that the boundary between employment, under-employment and inactivity remains blurred.
Construction declining, hospitality holding on
By sector, construction fell 0.4% (around 100 jobs lost) and business services dropped 1.4% (300 positions), hit by a national cut of 2,000 subsidised employment contracts on the island. Conversely, hotels and restaurants posted solid growth of +2.3% year-on-year, driven by tourism activity, while retail gained 200 jobs and temporary work grew 2.0%.
Building permits, meanwhile, jumped 14% despite the construction slump — a sign that projects are in the pipeline and sector employment could recover by 2027.
Why it matters
At 18%, Réunion faces structural unemployment that weighs on local consumption and business attractiveness. The trend is concerning: if the reduction in subsidised contracts is not offset by stronger training and job-insertion programmes, the risk of lasting social fabric deterioration is real. Q2 2026 results, expected in October, will be closely watched.
Source: INSEE Conjoncture Réunion no. 42 (Q1 2026 data, published July 2026).