I have seen it argued that their economy was doomed because Europe developed other sources for Cotton. The problem with this thinking is that Europe developed these alternative sources of cotton precisely because there was a US Civil War, and it badly disrupted their normal source of Cotton which was the South.
In the absence of the Civil War, slave produced cotton might still have been a profitable system for another 40 years or so. The increased capitalization the South would realize from selling it's product directly to Europe and avoiding the high taxes and middle man fees it was paying through New York, would have allowed the South to invest in more and more diverse industries in their own communities.
The South used to have it's own ship building industry. Those boarded up factories could have commenced building ships again, and the South could have carried it's own cargo.
200 Million taken out of the New York economy and transferred to the Charleston or Norfolk economy would have massively increased the capital available for industrial development.
It's not so easy for me to see that the cotton economy was doomed in the short run. Perhaps in the long run it was, but in 40 more years, it is quite likely the South would have diversified as the wealthy look for alternatives in which to invest.
All well and good. But where were the Southerners going to find all of the skilled mill wrights, pattern makers, machinists, jig & fixture men? To work at a skilled trade in a southern factory meant you could be replaced by a slave at any time. Ask the 450 men that use to work at Tredegar, replaced by slaves to lower production cost. With all the money that was made by the Southern Economy why could they only manage one large iron works in the entire south. Maybe this is one of the reasons that manufacturing, other than textiles, was very slow in developing in the South. Every ton of pig iron, every ton of iron ore, every ton of anthracite coal came from the North. Every drop of oil that lubricated a machine came from the Yankee whaling fleet or Pennsylvania oil fields. While the South was a bountiful agricultural are it was poor in resources necessary for heavy duty manufacturing. Like Japan, all of the manufacturing resources came to the South from somewhere else. You mentioned ship building in the South. While various species of ship building wood were readily available in the South, most of the iron fittings, steam engines, and propellers came from Northern manufacturers. Tredegar manufactured a few steam engines for the U.S. Navy, but never cast a propeller for a ship, nor did they manufacture iron castings for paddle wheelers.
Even with a tremendous amount of capital, the South lacked the skilled labor force and the raw materials to develop a serious manufacturing threat to the North. Forth years later, after the discovery of oil in Texas,iron in Alabama,
and bituminous coal for coking, the South would be in a much better position then they would have been in the late 1860s or 70 to launch a heavy manufacturing economy.