US companies, including Ford and Microsoft, are poised to boost business investment to a record in 2014, using a growing cash hoard to propel corporate spending past last year’s $2-trillion.

CEOs are buying new machinery and investing in real estate as a US budget deal and growth in Europe signal a rebound in customer demand. That marks a reversal from four years ago, when companies began restraining spending from prerecession levels and made do with the oldest equipment in 15 years, according to BMO Capital Markets.

“The US is on the verge of an early capital expenditure (capex) recovery, one that is likely to have some considerable legs,” said Brian Belski, BMO chief investment strategist.

CEOs who raised dividends and increased share repurchases in recent years must now lay the groundwork for future profit increases, said Mark Luschini, chief investment strategist at Janney Montgomery Scott. Investment will rise 6.7%, after a gain of about 2.6% in 2013, according to UBS Securities.

“They’ve got the cash and they have no choice,” said Scott Davis, a Barclays analyst in New York who covers industrial companies, including General Electric and Honeywell International. “They need to grow and they don’t want to lose market share.”

Companies on the Standard & Poor’s (S&P’s) 500 Index can draw on $3.4-trillion in cash as rising share prices make repurchasing stock less attractive and low borrowing costs dampen the urgency of paying down debt, Davis said. Private nonresidential fixed investment stood at an annualised $2.06-trillion at the end of September, according to US Bureau of Economic Analysis data.

Ford plans to increase investment by $1-billion, to $7.5-billion, this year to add capacity as analysts project US automotive sales will surpass levels not seen in at least seven years.

Microsoft plans to more than double investment in its fiscal 2014, which ends in June, to $6.5-billion from two years ago, mostly on data centres and networking equipment. And Honeywell plans to invest $1.2-billion, a one-third increase from 2013, in part to build new chemicals factories in Louisiana and Alabama.

Smithfield Foods, the pork producer bought in September by Hong Kong-based Shuanghui International Holdings, plans to increase capex to as much as $350-million over the next 12 months, up from $278-million in the fiscal year concluding April 28, 2013, and double the amount in 2011. The Smithfield, Virginia-based company has a “slate of nice payback projects”, said CFO Kenneth Sullivan in a December call with analysts.

Investments in physical assets, from machinery to buildings and technology, accounted for 12% of the economy in 2012, lower than the 13% in 2008 and 2007 before the deepest recession in six decades caused companies to pare spending.

Companies have juiced profits to record levels on the back of cost cuts and lower investment to cope with disappointing global growth. A financial crisis in Europe and US budget squabbles that culminated in a government shutdown last year sapped confidence. Now, it’s time to grow, Luschini said.

“I would like companies to demonstrate a capital expenditure programme that is consistent with needs to keep their plants and equipment efficient and productive and not starve the business for fear of what’s over the horizon.”

In December, the US government passed a Budget Bill, resolving contentious cuts to education, defence spending and infrastructure investments for now and helping to prevent another government shutdown for the next two years. At the same time, the Euro-area economy is predicted to grow 1% this year, after contracting 0.4% in 2013, according to ECB estimates, as it slowly emerges from a record-long recession.

Honeywell, the Morris Township, New Jersey-based maker of aircraft engines to thermostats, is investing to keep up with higher demand for chemical products designed to lower output of greenhouse-gas emissions, said CEO Dave Cote.

“These plants are already full the day we build them, so we’ve got to get them built,” Cote said in an interview in November.

Honeywell had kept capital spending at about 1.1 times the rate at which assets depre-ciate, or the value they lose over time. It is now accelerating that investment as it does “seed planting” for future growth, Cote said.

The reluctance to invest comes from a lack of confidence in the economy, which is growing slowly, and concern that higher outlays will crimp profit margins, Davis said. Operating margins for S&P 500 companies were 13.4% at the end of 2013, higher than a 20-year average of 12.05%.

With US economic growth forecast to accelerate to 2.6% this year from 1.7% in 2013, that may spur companies to expand factories to keep up with demand. The use of industrial capacity climbed to 79% in November, the highest level since June 2008 and matching a 20-year average.

A rebound in investment in the US may not be followed elsewhere around the world.

Globally, capital expenditures may decline because of a pullback in mining projects and as China grapples with excess capacity in heavy industries such as steel and cement and pushes toward a domestic-led economy, said Gareth Williams, an economist with S&P’s Ratings Services in London.

Meanwhile, Emerson Electric CEO David Farr said he is going on the offensive this year to boost sales after reining in spending. Emerson, a St Louis-based maker of compressors and automation equipment with a market value of $49-billion, expects global fixed investment to rise as much as 4% this year from 1% in 2013.