That occurred as the North was transitioning from an agricultural-based economy to one more grounded in transportation (railroads), industry (steelmaking), oil (petroleum, first exploited in the US in Pennsylvania and New York), electrical products (motors, generators, telephones, etc.), and more, all in the period 1850--1880. The real take-off of the North was largely post-1900 with automobile manufacture and the rise of New York City as a global financial and trading centre.
The South languished in part due to Reconstruction and being politically repressed by the North following the Civil War, but also for geographic and climatic reasons: it was hot and humid, and would remain hot and humid until electrification and air conditioning arrived ~1930--1950, the oil booms of Texas, Oklahoman, and Louisiana (~1900 -- 1940), and arrival of petrochemical industry (1950--).
Agreed that cotton was a ... weaker thread ... binding South and North than the South would have hoped for.
And whilst we're talking regional economic development, though an unrelated territory: I found it interesting a while back to find that Los Angeles in the mid-20th century was often the second-largest manufacuturing centre across a whole slew of industries: oil, automobiles, aircraft, tyres, among them. I've yet to find a good explanation of this, though my own hunch is that it was a combination of factors:
- Local petroleum sources, that is, a tremendous energy supply.
- Far enough from East Coast manufacturing that a local industry made sense.
- A sufficiently large local population to feed that demand.
This pattern emerged after the Great Earthquake and Fire of 1906 in San Francisco which greatly dampened development of Northern California, as well as the Bay Area's geographic limitations (a small peninsula, poor cross-bay transport until the creation of the Golden Gate and SF-Oakland Bay bridges in the 1930s), as well as a largely agricultural / timber orientation of Northern California's economy, with secondary strengths in transportation (ports, railroads) and finance.