Guadeloupe economy faces construction decline and rising costs

The economy in Guadeloupe is facing significant challenges, particularly in the construction sector. According to Insee, economic activity has been declining since 2025, with construction seeing a 9.3% year-on-year drop in paid hours during the first quarter of 2026. This decline is linked to a 19.7% decrease in new housing construction permits in 2025. Simultaneously, construction costs in the region rose by 0.4% in July 2026, driven largely by a 3.2% annual increase in construction materials, including significant hikes in prefabricated concrete, sand, and cement.

Social housing demand remains a critical issue across French overseas territories. In Guadeloupe, demand for social housing grew by 4.3% in 2025, matching the national average, with a success rate for allocations at 16%. This follows broader trends in territories like Mayotte and French Guiana, where demand has surged significantly.

In contrast to the industrial and construction downturn, the tourism sector shows signs of recovery. Hotel occupancy in Guadeloupe rose by 3.7% year-on-year in the first quarter of 2026, reaching 412,300 overnight stays, a trend largely supported by an increase in foreign visitors.