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Significant quantities of cotton began to be used after about 1600, firstly in linen/cotton fustians, but by around 1750 pure cotton fabrics were being produced and cotton had overtaken wool in importance. The Irwell and Mersey were made navigable by 1736, opening a route from Manchester to the sea docks on the Mersey. The Bridgewater Canal, Britain's first wholly artificial waterway, was opened in 1761, bringing coal from mines at Worsley to central Manchester. The canal was extended to the Mersey at Runcorn by 1776. The combination of competition and improved efficiency halved the cost of coal and halved the transport cost of raw cotton. Manchester became the dominant marketplace for textiles produced in the surrounding towns. A commodities exchange, opened in 1729, and numerous large warehouses, aided commerce.
In 1780, Richard Arkwright began construction of Manchester's first cotton mill.
Cotton mills in Ancoats about 1820
Manchester's history is concerned with textile manufacture during the Industrial Revolution. The great majority of cotton spinning took place in the towns of Greater Manchester, south Lancashire and north Cheshire, and Manchester was for a time the most productive centre of cotton processing, and later the world's largest marketplace for cotton goods. Manchester was dubbed "Cottonopolis" and "Warehouse City" during the Victorian era. In Australia, New Zealand and South Africa, the term "manchester" is still used for household linen: sheets, pillow cases, towels, etc. The industrial revolution brought about huge change in Manchester and was key to the increase in Manchester's population.
Manchester began expanding "at an astonishing rate" around the turn of the 19th century as people flocked to the city for work from Scotland, Wales, Ireland and other areas of England as part of a process of unplanned urbanisation brought on by the Industrial Revolution. It developed a wide range of industries, so that by 1835 "Manchester was without challenge the first and greatest industrial city in the world." Engineering firms initially made machines for the cotton trade, but diversified into general manufacture. Similarly, the chemical industry started by producing bleaches and dyes, but expanded into other areas. Commerce was supported by financial service industries such as banking and insurance.