In Monchique, 300 people in a population of 6,000 are out of work.
The 5% jobless rate is one of the lowest in the Algarve, contradicting the region’s unemployment rate at 20%, the highest in Portugal.
Monchique Mayor Rui André said: “The opening of commercial ventures in the town in the past year has helped create employment.
“The majority of those still out of work come from the construction sector, the hardest hit in the region.”