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.
This is true for a number of reasons.
First, slaves are not that well suited to the type of work that characterizes factories. Slaves would be too able to destroy expensive machinery "by mistake" as a way of resistance.
Second, much of the wealth of the South was tied up in slaves. This wealth could not easily be liquidated in order to buy the sorts of expensive machines that would have been needed.
Third, the South had created its whole society around the image of country gentlemen who had their plantations and lived a rural lifestyle with horses and hunting and such. This would have been ruined by a move to an industrial system.
So the main barrier between the South and industrialization was slavery.