The South, under the planter regime, did turn to textile manufacturing during the agricultural and railroading "Long Depression" c. 1837-1853, especially in Georgia, the "Empire State" of the South, which possessed an abundance of water-power. In summary:
"When agriculture suffered, mill building flourished. When agricultural profits rose, Georgia’s textile industry floundered. Georgians rationally pursued profits in both agriculture and industry but were mindful of market forces and the history of risks in each area. Nonetheless, despite the setbacks of the late antebellum period, the industrial facilities and expertise developed by Georgians before the war contributed to the Confederacy’s logistical ability to fight a truly modern war for four years against the industrial behemoth of the North."
-- M. Gagnon, "Antebellum Industrialization", New Georgia Encyclopedia
How can this tendency be developed once new agricultural depressions occur? Especially within the financially-independent Confederacy?
"Take Georgia, one of the most progressive and enterprising States of the South. In 1860 the value of agricultural lands returned for taxation was $157,000,000. In 1866 it was $105,000,000, a loss of 33 per cent. In 1886 the farmers of Georgia owned 72 per cent. of the wealth of the State; in 1888 they owned only 24 per cent.; yet during that time the population increased 60 per cent. In a recent address made by Hon. L.F. Livingston, of that State, he said that during the past ten years the property in the towns and cities of that State had increased in value $60,000,000, while in the agricultural districts it had decreased $50,000,000..."
-- Agricultural Depression. Its Causes--the Remedy. Speech of L. L. Polk, President of the National Farmers' Alliance and Industrial Union, before the Senate Committee on Agriculture and Forestry. April 22, 1890
Nonetheless, the progress of Confederate economy in 1865-1880 compared to OTL is most intriguing. As R. Taylor noted, shortly before the 1880s industrial boom: "Bank stocks, bonds, all personal property, all accumulated wealth, had disappeared. Thousands of houses, farm-buildings, work-animals, flocks and herds, had been wantonly burned, killed, or carried off..." The Cotton-States subsequently suffered financial and economic spoliation and governmental corruption, as well as the hostile acts of the Radical Congress and electoral grinding of the "outrage mill", harming outside investment and speculation. Southern public and private debt from the 1870s was massive, far greater than it had been in 1865.
"Capital had long since fled from the South, and was diverted in other directions. Money could only be had at enormous rates of interest (75 per cent to 80 per cent). The North and West were enjoying the greatest financial prosperity in their history. All capital was being used in booming and building up the Northwest into new States and increasing their material wealth. This was being done to its utmost limit, and there was no money to help the South. The great Western railroads were being built, backed by enormous grants of public lands by Congress, and these roads were planting immigrants (500,000 foreign) and citizens from other States in the West. Immigration had even gone westward from the people of the South who had despaired of better days (primarily to Texas). There was no immigration southward (aside from Virginia). The increase in population was only the natural one. There were but few banks, and Southern men had few friends among the great financiers anywhere. The South, in its looted and prostrated condition, offered no invitation to capital which promised even prospective returns. Northern capital strictly avoided the South in those gloomy days. To all appearances, the South was paralyzed. Her great wealth, as shown by the census of 1850 and 1860, which had been the accumulation from the earliest days, in slave property and material investments in all possible directions, had been swept away..."
-- Confederate Military History, Volume XII, Part XII
I think the instinct to overproduce cotton will continue, ultimately depreciating its global market price, although the growth of British spindleage is slowing compared to America and the Continent. All-in-all, morally and commercially, England is not like to be the consumer she was prior to secession, although some men think rapid Southern rail development is dependent on British capital as it was c. 1856-1861, even though Howell Cobb's "direct trade" group was fostering Continental connections, at least for the Georgian planter.