Dunedin City Council Water and Waste Services solid waste manager Ian Featherston said 7955 tonnes of recyclable material was collected from Dunedin kerbsides in 2008 - 13.5% more than the 7011 tonnes collected the previous year.
While he was delighted Dunedin residents seemed to be getting into the swing of kerbside recycling, he was concerned international markets for material - particularly plastics and glass - were drying up.
"It's good that Dunedin residents are getting into recycling. But it's becoming a nightmare to find places to sell it. Everyone's finding it the same."
During the past six months, recycling services across the country have diminished, staff have been laid off and materials are being stockpiled as councils and contractors try to find ways to deal with the slump in the world market for recycled materials.
Mr Featherston said the amount of recycled material sold by the Dunedin City Council to overseas markets had dropped 16% in 2008.
"In the last three months of 2008, sales dropped due to the global market crash. We are still collecting more, but we're having to stockpile glass and other products which have dropped in value but are still selling, albeit at much lower prices."
He hoped the situation was "just a lull" with a bounce back in six months.
"We've just got to ride out the situation and hope the markets, both within New Zealand and overseas, improve."
The council was stockpiling large quantities of glass at the Green Island landfill and plastics at Transpacific Industries (NZ) in Wickliffe St, Dunedin.
It was hoped once a new furnace at Auckland glass manufacturer Owens-Illinois Inc became operational next year, a new market for Dunedin's glass stockpile would be created.
"Whatever the difficulties we have finding markets, we don't want people to stop recycling. It's better to stockpile and have it as a resource than put it in the landfill," he said.
Central Otago Wastebusters manager Karen Noble said the picture was similar in Central Otago.
The organisation collected 20% more recyclable material in 2008 than the previous year, but only sold 1157 tonnes of it in 2008 - down on more than 1200 tonnes sold in 2007.
Waste management leaders, recyclers and councils from across New Zealand met recently to encourage the Government to help the struggling industry.
"This is too big for us to fix. It's too big for councils to fix. This is a global problem," Ms Noble said.
"To me, the Government should be finding and supporting new initiatives on how to use cardboard, paper and plastics within New Zealand so that it is processed here.
"We're not here to make a profit. We're here to protect the environment for future generations. We don't want a bail-out from the Government - we just want them to find ways to enable home-grown initiatives."
Environment Minister Nick Smith has said, through a spokesman, that he was considering a proposal from National's Waitaki MP Jacqui Dean to use money from a new waste levy.
The Government wanted good community recycling services retained.
