Why was industry limited in the south?

The major reason that industry did not take off in the South was slavery. By the time that industry arose in the rest of the US, slavery was so entrenched in the South that industry could not take hold ... So the main barrier between the South and industrialization was slavery.

The Union's industrial and economic capacity soared during the war as the North continued its rapid industrialization to suppress the rebellion. In the South, a smaller industrial base, fewer rail lines, and an agricultural economy based upon slave labor made mobilization of resources more difficult.