Optimism's new outposts: real estate, law, manufacturing and software

Andrew Glincher leads a 650-attorney global law firm headquartered in Boston. Cheryl Marquis is a self-employed court reporter based in the dry highlands east of Los Angeles. And in the past 10 weeks, both have made the same reassuring discovery.

The massive national move toward working from home hasn’t disrupted legal work as severely as people feared. "Thanks to technology and the terrific support of our colleagues, we are navigating what we need to do to practice law,” says Glincher, who is Nixon Peabody’s managing partner. 

Marquis is even blunter. Yes, shelter-in-place rules have shattered her long-time routine of sitting just a few feet from lawyers and witnesses, creating ultra-accurate transcripts of legal proceedings. But she doesn’t mind. Everything gets done just as smoothly from separate homes miles away. Zoom video has erased her 90-minute commute -- so she can work at home with her dog nearby. “It’s a blessing,” she says. “There is no downside for me.”

Across the legal profession -- and in real estate, manufacturing, information technology and software, too -- there’s been a recent pickup in people’s optimism about their employers’ prospects. No one’s getting giddy yet, and a lot of worries related to the COVID-19 pandemic remain. In a few economic sectors, though, the outlook is starting to brighten.

Evidence of this upturn emerges in the latest U.S. edition of the Workforce Confidence Index, which surveyed 5,811 LinkedIn members from May 4 through May 17. Respondents were asked if they felt confident about their companies’ outlook six months from now. Results were compared -- by industry -- against the attitudes expressed in three previous surveys, or waves, dating back to April 1.

Real-estate professionals showed the largest leap in confidence about their employers. In April’s first wave, they were among the most pessimistic groups, confronting the degree to which massive unemployment would chill residential buyers’ appetite, while new social-distancing norms would stymie common sales methods such as large open houses. 

To many people’s surprise, however, new U.S. home sales in April inched up 0.4% from March’s depressed levels, aided by record-low interest rates. 

In residential real estate, another lift comes from the growing power of virtual-tour technology. As The Wall Street Journal recently reported, buyers using services such as Matterport or even Apple’s FaceTime are able to pinpoint what they want without setting foot inside a home. 

Commercial real estate faces tougher challenges, particularly if prime tenants decide to let many employees work from home, even after COVID-19 health concerns are resolved. Cutbacks are already happening in that sector, but Brett White, CEO of market leader Cushman & Wakefield, recently told Wall Street analysts that he expects his industry’s downturn to be “markedly shorter” than the nearly two year slump associated with the financial crisis of 2008-09.

Software and information technology is another sector where confidence about the six-month outlook is rising. Employees in this sector have quickly embraced work-at-home approaches. Meanwhile, executives see new business opportunities putting tech to work in areas ranging from virtual reality to COVID-19 tracking systems.

There hasn’t been much good news lately for manufacturing, which had one of the most pessimistic outlooks in early April. The latest U.S. economic data, released in early May showed record drops in activity. Still, as factories rework their processes to minimize COVID-19 health risks, expectations are rising that manufacturers will be able to come out of this stronger.

Virtual technology isn’t yet working as a healing salve in other industries, including five where employees’ optimism is waning.

In public administration, high unemployment and an overall economic slump are pressuring governments to tighten budgets, freeze pay and in some cases make layoffs. All those are sources of strain. 

Hardware and networking companies, which include wireless and internet providers, looked like rare winners in the first weeks of shelter-in-place, as national internet usage soared. But companies such as T-Mobile are now warning investors that even if everyone wants connectivity, service providers must contend with out-of-work customers’ own troubles paying the bills.

Meanwhile, the entertainment sector is hard-hit by closures and social-distancing rules affecting live performances. Oil prices remain so low that many energy companies face financial struggles. 

In education, brief enthusiasm for online teaching is being jolted by uncertainties about schools’ ability to reopen their physical campuses in the coming academic year. For colleges and universities in particular, the prospect of a half-successful reopening -- with limited in-person classes, social distancing and diminished on-campus activities -- runs the risk of leading to reduced enrollment and frustration all around. 

Taking the full sweep of U.S. industries into account, respondents are holding steady with overall views about their jobs, their careers and their finances. The national Workforce Confidence Index (WCI) remains unchanged at +29, the same level it has shown for more than a month. The index uses a scale from -100 to +100 to reflect current sentiments and expectations. 

Other notable findings of the latest survey are as follows:

Health care is turning slightly more pessimistic. Its WCI score now stands at +31, down from +35 four weeks ago. A major concern is that as hospitals made the expensive shift to planning for a surge in patients, they needed to pause more profitable services, such as elective procedures. That has led to pay cuts, furloughs and layoffs for clinical and non-clinical roles.

Job-seeker confidence remains low but isn’t falling further. With an official jobless rate of 14.7% -- and new jobless claims still being filed at a rate of more than 2 million a week, this is a difficult time to find work. The latest WCI data shows job seekers’ confidence remains low at +13. Confidence is rising in states actively working to reopen operations.  

The smallest businesses are feeling most squeezed. People working at businesses with fewer than 10 employees show a continued decline in confidence, compared with both large-company employees and even with peers working at slightly larger (but still small) businesses. Those anxieties reflect the degree to which even reopened businesses aren’t returning to normal quickly. Many reopened restaurants are operating at 25% or 50% of capacity.

Millennials are most optimistic -- up to a point. People born between 1981 and 1996 score +34 on the confidence index, while older baby boomers are the least confident at +28. But millennials still voice concerns about the job market and their finances. 

Workforce Confidence Index Methodology

LinkedIn’s Workforce Confidence Index is based on a quantitative online survey that is distributed to members via email every two weeks. Roughly 5,000+ U.S.-based members respond each wave. Members are randomly sampled and must be opted into research to participate. Students, stay-at-home partners & retirees are excluded from analysis so we’re able to get an accurate representation of those currently active in the workforce. We analyze data in aggregate and will always respect member privacy. 

Data is weighted by engagement level, to ensure fair representation of various activity levels on the platform. The results represent the world as seen through the lens of LinkedIn’s membership; variances between LinkedIn’s membership & overall market population are not accounted for. Confidence index scores are calculated by assigning each respondent a score (-100, -50, 0, 50, 100) based on how much they agree or disagree with each of three statements, and then finding the composite average score across all statements. Scores are averaged across two waves of data collection to ensure an accurate trend reading. The three statements are: [Job Security] I feel confident about my ability to get or hold onto a job right now; [Finances] I feel confident about my ability to improve my financial situation in the next 6 months; [Career] I feel confident about my ability to progress in my career in the next year.

 Neil Basu, senior program manager for research and talent development at LinkedIn, contributed to this article.