How did the Civil War impact the Southern economy? The reconstruction of southern railroads benefited steamboat and shipping businesses that used the oceans and rivers to send supplies to cities across the South. The destruction of southern railroads limited southern exports from reaching the North which reduced tax revenue for southern'states. The reconstruction of southern railroads benefited southern laborers because new employment opportunities became available. The destruction of southern railroads limited the South's ability to import and export resources, which restricted the South's economic recovery from the war.