My knowledge of this is limited to certain time periods. I'm stronger on medieval and early modern periods. (I'm also going to go by modern country names because it gets confusing otherwise.)

German economic success pre-dates protestantism. The German "Imperial Cities" that eventually grew into the Hanseatic league were incredibly economically successful in the Middle Ages. An Imperial City meant that a city was answerable only to the Holy Roman Emperors and not the local duke/prince/lord your city happened to be in on that day (borders shifted a lot back then). The Hansa centered around Lubek, which is on the Baltic sea, and took over the Norse trading routes. The Hanseatic cities were through out Germany, Eastern Europe, and Sweden. And they had outposts at many other cities some of which would become major economic powerhouses down the road (such as Antwerp and Bruges). In addition to trading they were famous as ship builders and built ships for many countries. They were generally well known for the quality of their crafted goods. It is no accident the printing press was first created in Germany. Some cities were also well known for their glass.

The thing is political disunification isn't always a bad thing (see also the economic success of Northern Italian city-states). With the permission of the emperor, the Hansa could create their own rules and regulations about trading between these cities. They had freedoms other places didn't. For instance, the English monarchs would have taxes on import and export or establish monopolies. Other monarchs would object to supplying a foreign king with ships. But the Hansa had freedom to create their own policies. If one Hansa city had a problem they could all meet to discuss it and work it out even though they were technically of different countries.

Germany is actually pretty well located for trading between Eastern and Northern Europe and the West. In the North it is on the Baltic sea and those sea routes. It has navigable rivers through out the country going into Eastern Europe. And there is a lot of value within the country to export. Such as timber and grains (there is a lot of farming through out).

It is true that the Hansa faded away by the 16th century. The kingdom of Sweden grew in strength around this time and took back a lot of the Baltic trading routes. The cities of Belgium and the Netherlands (and later on England) became important economic forces themselves and didn't need the Hansa anymore.

But that merchant class that had been thriving didn't just go away. These cities were still known for their craftsmanship and they still had trade connections through out Europe. And these people educated their children.

So, when the industrial revolution finally came to the German territories around 1850 there was already a class of people who could step in and help the development. Now it is true that it took much longer to be established in Germany than other places. Those famous craftsmen and merchant class had the problem of strongly disliking change. Guilds were still in place to protect the men in crafts. And most of Germany, outside the major cities, was basically still a feudal state until Napoleon shook things up. Plus, now that political disunification was an issue. There wasn't anyone to insist the proper changes be made. But those were barriers to entry. Once factories became established there was an educated class ready to run them and trade in the goods produced. And ready to start up all of the things that popup alongside industrialization (banking, insurance, and other industries).

Also, once the industrial revolution started in England there was a strong need for coal. And Germany had a lot of coal and mines began springing up in the late 1700s. Once the industrial revolution came to Germany, proper, the local coal industry was a huge boon. Germany also had iron ore.

Bismark strengthened these trends and helped banks become established. But they were already well under way.

So, essentially, there was a strong tradition of hard work and craftsmanship starting in the Middle Ages. The face of it changed but it never went away. Although much of Germany was still feudal into late 18th century, it had a steady and educated merchant class. And Germany had a lot of natural resources that could be put to good use (coal, timber, iron ore).

ETA: The history of Germany (pre-Hitler) is actually really interesting. And there are a lot of other factors that could come into play like their emphasis on education in the cities relatively early on. The enlightenment in Germany tended to be part of middle class discourse (not just upper-class) and focused on German nationalism (and the prospect of unification aided the industrialization) in contrast to French enlightenment which tended to be negative toward Church and government. But all of that relation to the economy would just be speculation. Still worth checking out, though.

Sources: Origins of Modern Germany Geoffrey Barraclough. The Edge of the World by Michael Pye.