HOBBS, N.M. —

Tony Pearson can always tell when times are good in the New Mexico oil patch. It's all in the quality of goods passing through his pawn shop.

"When people bring in their good stuff, you know they'll be back quickly to get it," said Pearson, who has run TP Pawn for 20 years. "When the oilfield slows, forget it. It's junk. You might not see those folks again."

These days, Pearson's trade is looking great.

As consumers nationwide feel the pinch of gasoline near $4 a gallon or higher, this city of 30,000 residents in New Mexico's southeastern corner is thriving, riding a wave in the boom-and-bust cycle that defines an oilfield economy.

Subdivisions are going up and six hotels are under construction. City Hall moved into an empty bank building, spruced up by an $8 million renovation.

"Great things are happening here," said Bethe Cunningham, president of Lea County Economic Development Corporation.

Municipal gross-receipts taxes have doubled since 2001, surpassing $36 million during the past fiscal year.

It's not strictly skyrocketing gas prices that are helping Hobbs. Part of the building boom stems from a $1.5 billion uranium enrichment plant going up in Eunice, 20 miles to the south.

The facility will employ 300 when it goes online next year. Currently, there are 1,300 construction workers on site.

Then there's Zia Park, a horse racing track and casino that opened three years ago. And Colorado Energy is building an electrical power plant west of Hobbs, bolstering the city's reputation as a burgeoning energy center.

Still, it's black gold that drives the local economy.

"They have successfully diversified their economy, but oil and gas is still the bread and butter in Hobbs, bottom line," said Bob Gallagher, president of the New Mexico Oil and Gas Association.

And business is booming. Lea County, which includes Hobbs, produced a little more than half of the 66 million barrels extracted from New Mexico oil wells last year.

Two factors are driving the boom.

With oil prices recently reaching a record of $135 a barrel, the industry is well beyond the $75 to $80 cutoff needed to turn a profit on high-risk drilling projects, and after recent technological improvements, producers can afford to drill after years of marginal activity.

"The oil is there. You just have to untrap it," Gallagher said. "What we're seeing now is that people are going back to projects that were not economically feasible at $40 to $50 a barrel."

Yet for old-timers, it's impossible to forget the stagnant economy of the 1980s and 1990s. With oil prices at just $9 a barrel during a 1999 slowdown, Hobbs property values dropped as much as 40 percent.

"During the lean times, it seems the recovery years were getting longer and longer," Pearson said.

For now, Hobbs is racing to accommodate transient construction and oilfield workers seeking six-month housing leases. Other tenants might be new arrivals who need a rental while deciding whether to buy a home or build.

"We are just absolutely slammed," said Phyllis Eggimann, property manager for PMR real estate management services.

While there's no dispute the boom is great for Hobbs, the good times invariably bring a few wrinkles, too.

Lea County's unemployment rate of 2.1 percent is tied with Union County for the lowest in New Mexico. Problem is, companies are having trouble finding qualified workers.

"We're all fighting for the same job pool of people," said Charley Smith, owner of an oil rig company and two automobile dealerships.

Some who could work are unable to pass required drug tests. And when it comes to specialized workers, such as skilled auto mechanics to service late-model vehicles, good help is tough to find.

"There's not a lot of room for bargaining when an employee wants something," Smith said. "It's their market at the moment, and it's difficult when we're not really hiring new people. We're just stealing from each other."

Meanwhile, options are limited for affordable rental housing. Eggimann said she can secure a 4-bedroom home for a family at around $2,000 a month, while a 1-bedroom runs $550. Often, there are just one or two sites to consider.

"You may not have much of a choice, but I'll usually have something," she said.

Of course, high gas prices are affecting motorists in Hobbs just like anywhere else.

Smith said SUV sales have softened at his dealerships and oilfield companies are spending more on maintaining fleets of four-wheel-drive service trucks, rather than buying new vehicles.

"It's a two-edged sword," Gallagher said. "Just because Hobbs or the state of New Mexico is awash in cash, there are still people hurting out there. If they can't make rent or buy groceries, that's not good for the overall economy."