The financial services industry has had the largest decline in employer sentiment of all industries, according to recruitment agent Hudson.

Its Employment Expectations report released on Thursday says sentiment among the financial services and insurance industry in the January-March quarter has fallen 13 percentage points to 35% compared to the previous quarter.

The report says sentiment in the industry has fallen to its lowest level for a year, and attributes the drop in confidence among insurers to “reduced growth forecasts due to multiple severe weather events around Australia”.

Employment optimism over all industries has dropped for the first time in two years according to the survey of 7200 hiring managers, with a 4.9 percentage point drop in confidence from a record high in the first quarter of the year.

Hudson MD Gary Lazzarotto says the decline in confidence in the financial services sector is in line with the unsettled nature of the sector globally.

“Smart employers will maximise their current talent by continuing to invest in their employees,” he said.