Most of the war was being fought on Southern soil and that was negatively affecting them. The economy was also being harshly affected because they need the Northern states for exporting the goods out. The North had all of the factories as well which was also a negitive for the South. Another large factor is that the Union still has the Confederacy with the blockade. They can not get out of this blockade which is a negitive on their economy. Finally, lots of the land in the South was being destroyed in the war. The North and South were mainly fighting in the Southern states which was causing property damage. This was negatively affecting the economy in the Confederacy so they were not doing well.